On the 18th (local time), Jerome Powell, chairman of the Federal Reserve Board (FRB), said the central bank’s digital currency (CBDC) should coexist with cash.
Powell cited the CBDC report of seven central banking groups, including the International Settlement Bank (BOIS) and the Fed, at a cryptocurrency settlement conference hosted by the Basel Banking Supervisory Commission. “One of the three principles highlighted in the report is the CBDC. “In a flexible and innovative payment system, there is a need to coexist with other types of currency, such as cash.” He added, “The improvement of the global payment system will be made not only in the public sector but also in the private sector.”
Powell said he is conducting research on CBDC with the Boston Federal Reserve Bank (FRBB), which has leading researchers from the Massachusetts Institute of Technology (MIT).
In recent months, Secretary Powell has repeatedly emphasized that the United States will not take swift action in the issuance of digital dollars because of its position as the global key currency of the physical currency, the dollar.
However, this remark is in line with Chairman Powell’s previous remarks that the Fed is serious about the prospects for the digital dollar. Chairman Powell said the Fed would open up the topic in 2021 and announce it after parliamentary approval.
In the early stages where the government hopes to increase payment efficiency and reduce costs through blockchain, CBDC is an innovative payment method. Details about the CBDC have yet to be revealed, and opponents argue that most transactions today already involve digitized money.
There is fear that some regimes may use the CBDC to strengthen financial oversight. Currently, the US is expected to secretly proceed with the development of its own CBDC.