US Federal Reserve Chairman Jerome Powell said the regulator will not issue a digital dollar until all the risks and challenges associated with its introduction are eliminated.
Powell made this announcement in a speech at the International Monetary Fund conference on cross-border payments. In his words, the United States doesn’t strive to be the first to issue its own digital currency. Issuing a government stablecoin is a serious task that needs thoughtful research. It is necessary to consider not only the opportunities presented by the introduction of the digital dollar but also its potential risks, taking into account the fact that the US dollar is the world’s reserve currency.
“We don’t need to be the first”
“We have not yet made a final decision on the digital dollar release. I do not believe that given the current situation, this task should be a priority for the country. There is no need to aggressively push-forward the creation of a state-issued cryptocurrency. It is much better to do it properly and efficiently, and not hastily, just so we can be the first,” highlighted Powell.
He emphasized that, unlike many countries, in the United States there is a strong demand for cash. Furthermore, the country already has a highly developed financial and banking sector – most of the population has access to banking services, and many people use electronic payment systems with their current functional capabilities.
The US central bank will not issue its own digital currency until all associated risks have been removed. This requires providing a high level of protection against cyber-attacks and fraud, as well as eliminating the threat to financial stability and the country’s monetary policy. Even more importantly, the authorities need to think about how to prevent illegal activities with the digital dollar, while also maintaining the privacy of user information and ensuring the safety of assets.
Private firms should not be a part of the process
According to Powell, private firms should not participate in the development of state-owned cryptocurrencies – it is the central bank’s responsibility to do this. On the other hand, however, the American Bankers Association does not support the issuance of the digital dollar, saying that if this happens, the US Federal Reserve would become a “monopoly” supplier of currency, bank accounts, and payment services altogether.
