Federal Reserve Chairman Says Will Engage With Americans on Digital Dollar Developments

Jerome Powell, the Chairman of the Federal Reserve, recently spoke about America’s plans going further with the development of its own central bank digital currency - Digital Dollar.

Speaking before the House Committee on Financial Services, Powell said that the U.S. central bank will “engage with the public” on Digital Dollar. This is for the first time that the central bank has set itself a deadline for the development of its CBDC.

Adding further about the Digital Dollar project, Powell said: “This is going to be an important year. “This is going to be the year that we engage with the public pretty actively including some public events that we are working on, which I’m not going to announce today.”

Powell said that the Federal Reserve won’t make any decisions on individual basis. Rather, it will go to the public to discuss the tradeoffs involved with the digital currency project.

“There are both policy questions and technical questions that relate between those two and they’re very challenging questions,” Powell said. “We’re going to have a public dialogue … in the meantime we’re working on technical challenges and also collaborating and sharing work with other central banks around the world.” 

He further added that the central bank will remain careful on the introduction of the Digital Dollar. It will make sure that America’s CBDC doesn’t “undermine … healthy market function.” 

In a similar situation, even the governor of the Indian central bank - Shaktikant Das - said that RBI has started its procedural development on India’s own digital currency. “While we cannot guess the date of its launch, it is receiving our full attention,” he said.

However, the views of India’s monetary authority are fundamentally opposed to cryptocurrencies like Bitcoin. Das said that such public cryptocurrencies undermine the stability of India’s financial system.

However Das added that “The RBI is not opposed to the blockchain framework, on which cryptocurrencies such as bitcoin are traded. Blockchain technology is different and its benefits need to be exploited”.

CBDC developments are catching up pace worldwide with China taking an early lead in the matter. Just recently, Chinese central bank - People’s Bank of China (PBoC) - collaborated with the central banks of Thailand and UAE to test cross-border digital currency payments.