Fed Chair Jerome Powell Says CBDCs Must Coexist With Cash
- The Bank of International Settlements and the Fed have been assessing the feasibility of CBDCs.
- Powell said the research showed that CBDCs need to coexist with cash to create an innovative payment system.
Federal Reserve chairman Jerome Powell speaking at a Brookings panel, “Are there structural issues in U.S. bond markets?”, 3 August 2015. Brookings Institution
Powell was addressing attendees at a conference hosted by the Committee on Payments and Market Infrastructures in Based, Switzerland. He said that improving the global payments system is only possible through the combined engagement of policymakers, private-sector participants, and academia.
He also addressed central bank digital currencies, a hot topic in the world of global payments. While he previously noted that a digital dollar is a “high priority” project for the United States, he said that the country wasn’t in a rush to create one.
Nonetheless, the Bank of International Settlements and a group of seven central banks, which includes the U.S. Federal Reserve, recently accessed the feasibility of central bank digital currencies (CBDCs) in helping central banks deliver their public policy objectives.
One of the three key principles highlighted in the report is that a central bank digital currency needs to coexist with cash and other types of money in a “flexible and innovative payment system.”
With the COVID-19 crisis highlighting the issues of the current payment systems, the Federal Reserve’s board of governors has been conducting “experiments” with CBDCs. According to Powell, the Federal Reserve Bank of Boston has been collaborating with MIT researchers to explore digital currencies.
- The head of China’s central bank digital currency institute said the e-CNY has undergone a major upgrade, and should be made available as an option in all retail scenarios.
- The PBOC official noted that platforms can integrate the CBDC in the short term using QR codes, and focus on upgrading their payment tools in the long run.
Office building of the People’s Bank of China. Flickr
- The current governor of Florida, Ron DeSantis, announced he is joining the race for the 47th president of the U.S. during a Twitter Spaces event on Wednesday.
- During his speech DeSantis declared his support for Bitcoin and the wider crypto space, noting that if Joe Biden is re-elected “they’ll probably end up killing it”.
- Planned for 1 April, the CBDC trial will involve real consumers and real transactions, though they will be limited to a certain number of customers and transfers.
- The pilot, however, will not be opened to the general public in its first phase, and will only be opened to customers chosen by the 13 participating local banks.