The chairman of the Federal Reserve, Jerome Powell, mentioned that there are several unresolved issues around the central bank digital currencies (CBDCs), and the bank is taking its time before the launch. Powell added that the Federal Reserve has no urgency regarding the launch of a CBDC. During a virtual event, the Fed chairman said that the central bank is determined to launch a CBDC efficiently rather than quickly. “We don’t feel an urge or need to be the first. The launch will take years rather than months,” the chairman added.
Fed Chairman also mentioned the potential benefits of a CBDC.
Federal Reserve Chairman also mentioned the potential benefits of a central bank digital currency. He also outlined the heavy investments that the Fed has already made in the research of blockchain technology and policy issues around CBDCs. “We know that in the past, when private-sector money is created, the public sometimes just thinks of it as money. At some point, they find out that it’s not money and that’s a really bad thing we need to avoid. Fed will be focused on better regulatory answers for global stablecoins. We believe there are potential costs and unresolved questions around CBDCs,” Powell said during the online event.
Central banks continue to explore CBDCs.
Several major central banks across countries are now actively researching central bank digital currencies and making real-world testing plans. Though many smaller economies have already launched versions of their digital currencies, China is the only major one to complete the development and initiating a full-fledged plan to test the digital yuan. As reported earlier, Cayman island launched a national digital currency this year. Countries including Canada, Japan, the Philippines, and many others are actively exploring CBDCs.