The Federal Reserve is still undecided on whether the United States should roll out a digital dollar, according to comments from Chairman Jerome Powell.
Speaking at a recent press conference, Powell said the Fed was still weighing up the advantages of a central bank digital currency (CBDC), and was in no rush to reach a decision on committing to a rollout of the technology. He said the Federal Reserve intends to publish a paper in due course setting out its thoughts on digital currency, and whether the U.S. should adopt a digital dollar.
“We are working proactively to issue a CBDC and if so, in what form. We think it is our obligation to do the work both on public policy and technology to form a basis for making an informed decision. The ultimate test we will apply when assessing a central bank digital currency and other digital innovations is, ‘Are there clear and tangible benefits that outweigh any cost and risks?’” Powell said.
Despite central bank counterparts around the world pressing ahead with their own plans for a CBDC, Powell insisted the U.S. would not rush to follow, with the Federal Reserve instead taking its time to get the right model in place.
While the U.S. has been accused of being behind the curve in terms of CBDC innovation compared to major global rivals, including China, Powell insisted that the best approach was one that took sufficient time to consider the full details of any digital currency before committing to a launch.
The developments come in the week where HSBC said it was working with eight national central banks to develop their CBDC programs, while sounding a positive note about the technology and its role in the economies of the future.
While work on the concept is still ongoing in the U.S., some lawmakers are already welcoming plans that would see a central bank digital currency issued by the Federal Reserve in due course.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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