Fed Official: Digital Dollar Decision Still a Long Way Off
The Federal Reserve’s vice chair for supervision has affirmed that the U.S. central bank is
“a long way” from making a decision on whether to issue a central bank digital currency (CBDC). The Fed official also voiced concerns regarding USD stablecoins, emphasizing that they
“could pose significant risks to financial stability, monetary policy, and the U.S. payments system.”
“As the pace of innovation increases, the payments landscape continues to evolve with the emergence of new programmable payments platforms, including those built on distributed ledger technology and blockchain technology, and new forms of digital assets, such as cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs),” he said.
“In my view, as both the issuer of U.S. currency and an operator in the payments system, the Federal Reserve must understand these developments and the tradeoffs they introduce.”
Barr’s statements echo those made by
Federal Reserve Chair Jerome Powell, who has similarly stressed that the Fed will not proceed with the issuance of a digital currency without clear authorization from Congress.
Powell also stated in September last year that it will take at least a couple of years for the Fed to come to a decision on whether to issue a digital dollar.
