The US central bank has been thinking about a digital dollar for over a year. The Fed is carefully evaluating whether it will issue a Central Bank Digital Currency. If it does, it will also need to define what form the digital currency takes.
Chairman Jerome Powell announced to the media yesterday that the US Federal Reserve will be releasing a paper on the matter soon. Since last May when Powell announced a more detailed study was in the offing, Historic City News has followed the move.
“We think it’s really important that the central bank maintains a stable currency and payments system for the public’s benefit. That’s one of our jobs,” Powell said. “Where the public’s money is concerned, we need to make sure that appropriate regulatory protections are in place, and today they really are not in some cases.”
Even though other nations, notably China, have speedily transitioned into crypto, the Federal Reserve said that it does not feel pressured to fast-track its decision-making.
“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 at his post-meeting news conference. “I don’t think we’re behind. I think it’s more important to do this right than to do it fast.”
The Federal Reserve of Boston took leadership duties for this project. It partnered with the Massachusetts Institute of Technology to study whether a US CDBC will make payment systems more efficient. Boston Fed Governor Lael Brainard is a known advocate for cryptocurrency. Brainard advocates for a CDBC as it can get payments quickly to Americans during crisis situations.