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Jerome Powell Says Federal Reserve will Issue Report on CBDCs

Jerome Powell Says Federal Reserve will Issue Report on CBDCs
Jerome Powell Says Federal Reserve will Issue Report on CBDCs

The Federal Reserve has confirmed that it is looking into digital currencies, whose use cases will be discussed in a crypto report that the Federal Reserve will publish soon.

The Federal Reserve chair, Jerome Powell, has stated that the body has started researching about CBDCs. The research will help determine whether it is viable to launch an official digital currency for the US. Powell also stated that the Federal Reserve would release a paper that details the research.

A US CBDC

In his remarks during an interview with CNBC, Powell stated that the US was already investigating CBDCs. “We are working proactively to evaluate whether to issue a CBDC and if so – in what form,” Powell stated.

The Federal Reserve chair has earlier stated that the body would publish a report that discusses CBDCs. At the time, Powell stated that publishing such a paper would follow active engagement with elected officials who will discuss the policies surrounding CBDCs.

In July, Powell confirmed that a CBDC paper would be published and stated that the report would look into the regulatory landscape of cryptocurrencies such as stablecoins, private coins and CBDCs. Powell had stated that the paper would be released this month.

Despite Powell being actively involved in looking into digital assets and weighing their potential, he does not show any rush in implementing a digital currency, given that competing economies such as China have already made major milestones in CBDC development.

“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,” he added.

Powell also stated that the main goal of the Federal Reserve was to put public interests first by offering a stable financial ecosystem. To this end, the Federal Reserve would first investigate whether CBDCs had positive effects on economic stability.

Benefits of CBDCs

Besides the Federal Reserve, other bodies involved in this research include MIT and the Boston Fed. Lael Brainard, the governor of the Federal Reserve, had initially stated that implementing a CBDC would play a critical role in boosting liquidity in case of economic recession.

Powell also recognizes some benefits of CBDCs, as he states that they will bring solutions to the unregulated private coins sector. He also stated that regulatory frameworks needed to be in place to protect public money.

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