The central bank of digital currency (CBDC) or digital dollar is currently under study since the implications can be tough for the existing economic system in the United States.
The United States Federal Reserve (Fed) System is now assessing the risks on the financial structure. The Fed board chairman spoke to US representatives with the intention to pursue the federal board into deploying the digital dollar CBDC.
US CBDC digital dollar on way?
New: Powell told Congress today that the Federal Reserve is exploring whether it makes sense to issue its own digital currency that could be used by households and businesses pic.twitter.com/lH3pnSLkiV
— Zach Warmbrodt (@Zachary) November 20, 2019
Jerome Powell Chairman US Fed Board responding to the U.S representatives French Hill and Bill Fosters revealed that the Fed is not planning to launch or developing the digital dollar.
He furthers that the Federal Reserve Board has however assessed the deployment of the digital dollar in the past and continues to evaluate the pros and cons of the venture shall it comes to the see the light.
Powell further reveals in the letter that the Fed is tinkering with a little pet project of their own to better understand various situations that may arise and seek opportunities in case of deployment.
Journalist Zachary Warmbrodt broke the news on Twitter with the response from French Hill, who appreciated the effort taken up by the US Fed.
@RepFrenchHill says he’s pleased the Fed is exploring the costs & benefits of a U.S. digital currency. “This decision would have far-reaching implications on every aspect of America’s monetary policy and requires a deep level of analysis to ensure proper implementation.”
— Zach Warmbrodt (@Zachary) November 20, 2019
However, Powell, on the other hand, explains that there are various legal and technical aspects still under question and the transaction system’s impact on the current economy. The study is also looking into the threats digital dollars may pose to the financial stability of the currency. The US government is skeptic of the Facebook Libra project and the digital dollar is deemed the right fit for the country.
Featured Image by US Fed
