- The US Federal Reserve chair insisted the US would not be in a rush to adopt a central bank digital currency (CBDC).
- Jerome Powell announced the US’s intentions of pacing it with crypto at the International Monetary Fund seminar on October 19th, 2020.
- Mr. Powell said it is crucial to get it right than to be in the lead.
The US treads the CBDC path slowly
The US Federal Reserve chair insisted the US would not be in a rush to adopt a central bank digital currency (CBDC). Jerome Powell announced the countries intentions of pacing it with crypto at the International Monetary Fund seminar on October 19th, 2020.
The seminar was about cross border payments and digital currencies. Mr. Powell said it is crucial to get it right than to be in the lead and a significant stance Mr. Powell is taking is to ensure the private sector collaborates.
In the past, Powell had separated the Fed from the Digital Dollar Foundation last June. Mr. Powell wanted people to know that the role of the reserve differed to that which the private sector played.
The Digital Dolar Foundation aims to ensure policymakers work towards a US digital dollar that is identical to physical currency. Founders of the foundation were worried that America would cease to be relevant if it did not pick up the pace on the CBDC project.
China vs the US
What could explain America’s calm attitude towards crypto could be the fact that it does not face the same need as China to grow its money liquidity. China is currently forcing people to use Digital Currency Electronic Paper (DCEP), its national digital currency.
Firms in China tend to opt for USD because of how liquid it already is but some are looking to the United States to do more for crypto. Brazil is pushing for the US to adopt cryptocurrency while, Europe is peaking at it as more countries consider adopting the currency.
The pressure for the United States to go crypto is not sufficient to overpower the lack of need for its Economy to make a move.