Federal Reserve Chairman Jerome Powell has Approved that the Central bank conducts extensive research and development on the digital dollar.
As Bloomberg reports, Powell’s affirmation of the Federal Reserve’s commitment to the digital dollar does not mean that issues bordering on the adoption of such a dollar have been resolved.
“It’s a very, very big, complex project. And, you know, it’s really just a table bet, ”Powell said in an interview with 60 Minutes on CBS. “It means understanding the technology and the possibilities so that you can really address the political issues.”
The financial ecosystem has changed in recent years as more Americans interact with privately issued digital currencies and stable coins. As other existing alternatives for conducting transactions become available, the impact of the dollar is gradually waning and this is viewed by some stakeholders as the perfect time to issue a compatible digital currency that is government backed. However, the Federal Reserve has yet to decide whether a digital dollar will benefit people.
“We didn’t choose, because here too the question arises whether it will benefit the people we serve.” Powell said. “And we have to answer this question well. And we need to involve the public and Congress deeply in this process because it would be an important step if we did. “
The office of the currency auditor (OCC) allowed the national banks to retain custody of stablecoins, marking a new shift in the country’s strict stance on digital currencies. Today, Federal Reserve officials say they are exploring ways a government-backed digital currency can be incorporated into today’s currency landscape, partly because of its impact on deposit insurance and access to the Fed for emergency liquidity.
While answering these questions can slow down digital dollar adoption efforts, the ultimate goal is to get the process right, rather than following the train.
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