Fed Chair Powell Updates Progress of Digital Dollar, Says 'I Don't Think We Are Behind' on CBDC

Fed Chairman Jerome Powell on Progress of the US CBDC
The U.S. Federal Reserve has not made a decision whether to launch a digital dollar, Fed Chair Jerome Powell revealed on CNBC Wednesday.

He was asked for an update of the Fed’s work on central bank digital currency (CBDC). “We think it’s really important that the central bank maintains a stable currency and payments system for the public’s benefit. That’s one of our jobs,” Powell began. “We also live in a time of transformational innovation around digital payments and we need to make sure that the Fed is able to continue to deliver to the public a stable and trustworthy currency and payment system.”

He continued: “There’s extensive private innovation — a lot of which is taking place outside the regulatory perimeter. Innovation is fantastic. Our economy runs on innovation. But, where the public money is concerned, we need to make sure that the appropriate regulatory protections are in place, and today they really are not in some cases.” The chairman of the Federal Reserve added

We’re also investing heavily right now in building a new settlement system for instant payment in the U.S. It will be the first such major expansion of our core payment system since the 1970s. We found the case for this quite compelling for consumers, businesses, and just ensuring that all financial institutions have access to the payment system,” he continued.

Powell concluded: “So, bottom line, we haven’t made a decision about the CBDC, but we will be issuing a discussion paper soon in order to form the basis of this public interaction that we will have.”

Powell was further asked whether he was “concerned at all” that the U.S. is getting behind in the area of central bank digital currencies.