Stock Groups

The Fed Continues to Analyze How and When to Launch the Digital Dollar By DailyCoin

[ad_1]

The Fed Continues to Analyze How and When to Launch the Digital Dollar
  • Fed Chairman Jerome Powell spoke openly about the body’s plans to issue a digital currency.
  • Powell stated that he was not worried about China’s advancement, or the European Union and the other nations using central bank digital currency.
  • There are however concerns in Washington about the future fiat digital money.

Jerome Powell (Federal Reserve Chairman) confirmed that there are progresses being made towards a digital currency. According to Powell, the head of the US central banking said that the Fed was currently preparing a document about the subject that would be published shortly.

Powell reported that the Fed’s board has not made the decision yet. Meanwhile, most of the central banks of the world’s richest nations, including the European Central Bank (ECB) and the Bank of China, are already well advanced in their fiat digital currency projects.

The Fed Chief says that the Fed does not feel pressured into doing anything quickly.

On The Flipside

  • But that’s not exactly what the latest moves by Treasury authorities and US regulators like the SEC show.
  • They have been in dispute with banks over cryptocurrency regulation and risks.
  • The immediate issue is whether private or fiat digital currency will prevail.

It is well-known that the Fed, the Commodity Futures Trading Commission (CFTC) and the Office of the Comptroller of the Currency not only focus on regulations but also work with cryptocurrencies.

“I think it’s important that we get to a place where we can make an informed decision about this and do so expeditiously,”
Powell said during a news conference. This was a statement that reflected the fact that the United States has not been left behind.

“I think it’s more important to do this right than to do it fast.”
The official explained that the Fed is “working proactively to assess whether it will issue a CBDC and, if so, in what form.” Washington lawmakers, the Fed, the Treasury, and other regulators are concerned about the future of digital money (CBDC and stablecoins).

Defenders and Detractors of Digital Money

The establishment of a fiat digital dollar, controlled by the state, is a short-term objective of the Fed, according to what it has been saying for more than a year. In collaboration with financial sector agencies, the bank is currently conducting several consultations.

The Fed has several supporters of digital fiat currency. Lael brainard, the Boston Fed Governor, has joined this effort with MIT.

The two believe that the digital dollar will be more efficient for payment systems. Randal Quarles vice president of supervision is among those who doubt these efforts.

Benefits for the Financial System

In defense of the digital currency issued by the central bank, Brainard claims that it would bring multiple benefits to the financial system. He mentioned that the digital currency would allow people to receive their payments quicker, particularly in crisis situations. Also, it could provide services to those without bank accounts.

“We think it’s really important that the central bank maintain a stable currency and payments system for the public’s benefit. That’s one of our jobs,”
Powell said.

He spoke of driving a “transformational innovation” for the area of ​​digital payments. He said the Fed was still working to develop its system like FedNow and continue plans regarding this topic.

According to Powel, the test for the establishment of a CBDC is “if there are clear and tangible benefits that outweigh the costs and risks.”

However, the pressure being exerted by news coming from around the world related to the advancement of digital currencies from central banks is difficult to hide. This is because governments are eager to challenge private stablecoins.

What is the reason you should care?

  • Many have stated that the Fed should quickly decide whether to issue a digital currency. This would put the US dollar in danger as an international payment instrument and reserve currency.

These concerns are not Powell’s, at least in theory. According to the Fed chief, the dollar is “in a good place.” However, he did raise concerns related to crypto regulations in general.

If the Fed decides to pursue the US’s digital currency, he believes it will need congressional authorization.

“When it comes to public money, we have to make sure that there are the right regulatory protections in place, and today there really aren’t in some cases,”
Powell said.

EMAIL NEWSLETTER

Join to get the flipside of crypto

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7]
With just one click, you can unsubscribe at any time.

Continue reading on DailyCoin

[ad_2]