Chairman Jerome Powell says the paper represents the beginning of ‘a thoughtful and deliberative process’ as the Fed weights CBDC.
May 21, 2021, | AtoZ Markets – In the summer of 2021, the US Federal Reserve (FED) will publish a discussion paper that will complement its earlier research on the feasibility of issuing a digital dollar. This is stated in a press release from the regulator on Thursday.
Fed says CBDC will not replace cash
According to the report, the main concerns of the authorities are whether the United States will be able to improve the current domestic payment system.
“The CBDC design will raise important questions of monetary policy, financial stability, consumer protection, legislation and privacy and will require careful analysis, including input from the public and government officials,” said Fed Chairman Jerome Powell.
According to him, the digital dollar will not replace ordinary money, but supplement it. The official made a similar statement in March 2021 at a conference on virtual payments.
Earlier, the chairman of the US Senate Banking Committee Sherrod Brown called on the Fed to investigate the possibility of issuing a digital dollar . In his opinion, the department should become a leader in the field of CBDC.
We will remind, in February, the head of the US Treasury Janet Yellen mentioned the need to consider the possibility of launching a digital dollar.
Central banks around the world have shown interest in CBDCs, and many of them are working actively on the same. For example, China has is actively testing the digital yuan after the Hong Kong security law passed in 2020.
The Bank of Japan (BoJ) has launched the first phase of its proof-of-concept program for a CBDC and is expected to be completed by March 2022.
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