Jerome Powell – the active chair of the Federal Reserve – says they have begun studying whether to launch their own digital currency and will soon be releasing a paper on the matter.
Possible Digital Currency for the United States
Powell confirmed that investigations were underway in an interview with CNBC this Wednesday.
“We are working proactively to evaluate whether to issue a CBDC,” said the chairman, “and if so– in what form.”
He follows with the promise to publish a “discussion paper” about it in the near future, through which the Fed will publicly engage with elected officials on the surrounding policies of such a project.
Powell spoke of this paperback coming in July, adding that the report would cover the entire cryptocurrency landscape, including private coins, stablecoins, and CBDCs. It was scheduled to be released this month.
Though Powell is interested in the “transformative innovation” of digital currency, he’s also in no rush to implement one ahead of his national competitors:
“I think it’s important that we get to a place where we can make an informed decision about this and do so expeditiously. I don’t think we’re behind. I think it’s more important to do this right than to do it fast.”
The chairman adds that the Fed’s primary objective is to benefit the public with a stable currency and payments system. They intend to test whether a CBDC could have a net positive influence on that matter.
Benefits of a CBDC
The Fed’s CBDC research is being done in collaboration with Boston Fed and MIT, as told by Federal Reserve Governor Lael Brainard last month. Brainard is an advocate of implementing a CBDC, citing the power to quickly provide liquidity to the public during an economic downturn.
Chairman Powell implies that CBDCs can also be a solution to the largely unregulated world of private coins that currently exist.
“Where the public’s money is concerned, we need to make sure that appropriate regulatory protections are in place, and today there really are not in some cases.”