Fed Chairman Discusses a US "Digital Currency" with Congress

We continue to monitor this space since central banks do continue to talk about the idea of possible issuing central bank digital currencies. We have several articles on the blog this month that cover various aspects of this issue.

Here we have Fed Chairman Powell responding to Congressional inquiries about it. There is nothing really new to report here but below I have posted a couple of excerpts from this news article on Yahoo about Powell's recent comments to Congress.

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"On Tuesday, Federal Reserve Chairman Jerome Powell gave his monetary policy report in front of the U.S. House Financial Services Committee, and then withstood hours of questions from members of Congress.

Rep. Bill Foster, a Democrat from Illinois, spent his entire five minutes asking Powell about cryptocurrency.

That line of questioning yielded some perspective from Powell that the Fed chair not previously given, and his responses could stoke optimism or disappointment from many in the cryptocurrency world, depending on how they want to parse his typically very deliberate word choice.

So, what did we learn about Powell and crypto?"

. . . .

“Frankly, Libra really lit a fire,” Powell said, “and was a bit of a wakeup call that this is coming fast and could come in a way that is quite widespread and systemically important—fairly quickly, if you use one of these big tech networks like Libra did. We fully appreciate the importance of making quick progress—we have not decided to do this, though. There are many questions that need to be answered around digital currency for the United States, including cyber issues, privacy issues; many many operational alternatives present themselves, so we’re going to be working through all that.”

Please click here to read the full article on Yahoo Finance

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My added comment: This article goes on to further state that Chairman Powell made it clear that the Fed has no current plans to implement a central bank digital currency in the US and another article I read said the US sees no need for it any time in the next five years.

Coming up later this month are some updates from the BIS on its views on central bank digital currencies and a new report from the OMFIF on CBDC's based on a recent global survey poll.

Added note: A thank you to reader Doug in the comments below for this link related to the Fed and a future digital currency:

https://www.coindesk.com/trumps-fed-nominee-judy-shelton-says-us-should-be-proactive-on-digital-dollar