Fed Chairman Powell Updates Efforts to Create Digital Dollar, Says Risks and Trade-Offs Being Thoroughly Evaluated


Federal Reserve chairman Jerome Powell says the Fed is methodically exploring the creation of a digital version of the US dollar while evaluating the risks and trade-offs of a central bank digital currency (CBDC).

In a panel hosted by the International Monetary Fund on October 19th, Powell says the US has an obligation to lead in policy and innovations with regards to cross-border payments, but given the dollar’s unique position as the world’s primary reserve currency, there’s a need to be cautious about it.

“We do think it’s more important to get it right than to be the first. And getting it right means that we not only look at the potential benefits of a CBDC but also the potential risks and also recognize the important trade-offs that have to be thought through carefully.

We have a responsibility both to the U.S and to the world that any steps taken for US digital currency be taken safely. We’re absolutely committed to the soundness of the dollar into safe and efficient U.S dollar payment system.

So, in addition to assessing the benefits, and there may well be benefits, there are also some quite difficult policy and operational questions that need to be thoroughly evaluated. Just to mention a few: I would mention the need to protect a CBDC from cyber attacks, counterfeiting and fraud, the question of how a CBDC would affect monetary policy and financial stability, and also how could a CBDC prevent illicit activity while also preserving user privacy and security.”

Powell believes in the benefits of a CBDC, but admits it’s going to take a lot of thought to work through operational and policy issues.

“So they’re not simple questions and the answers are going to need to be comprehensively understood.”

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Fed Chairman Powell Updates Efforts to Create Digital Dollar Says - Fed Chairman Powell Updates Efforts to Create Digital Dollar, Says Risks and Trade-Offs Being Thoroughly EvaluatedDisclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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