Fed chairman Jerome Powell confirmed that he and his colleagues are “evaluating” the introduction of a digital dollar, as well as working on software development for it. “It’s a possibility,” he said.
In an interview for 60 minutes, Chairman of the Federal Reserve Jerome Powell discussed the effect of cryptocurrencies on the global economy, as well as the possibility for creating a US version of the Chinese “digital Yuan”, the first digital fiat currency sponsored by a major state.
“We are actually evaluating that. Most major countries are now looking at the possibility of adding a digital currency,” he said.
The Fed chairman insisted that the primary question is whether or not a form of digital currency would actually benefit the public and that he wants Congress involved.
“That’s the question we are asking. We are working very hard on that. We’re also doing quite a lot of technological experiments,” said Powell.
When asked about cryptocurrencies (including bitcoin) the Fed Chair stated that they are “not at a scale that is concerning at this point”. In the recent past, Powell has claimed that bitcoin is similar to gold and may even be replacing gold.
The final decision to introduce a digital fiat currency, he stressed, has not been made. Both the congress and the public needs to be involved in that question, Powell insisted.
Nonetheless, when pushed to clarify, Powell confirmed that the Federal Reserve is working on software development and even a graphic design for what the new digital currency would look like.
China has unveiled its own digital currency, the first major economy to do so. The currency is said to enable the Chinese government to have greater capability to monitor the economy and the people. The Chinese have even experimented with expiration dates to encourage holders to spend their money more quickly during recessions.
The U.S. meanwhile intends to take its time, according to Powell. “We’re the world’s reserve currency. We need to get this right,” he emphasized. “We don’t need to be first, we need to get it right.”