The US Congress will get guidance from the Federal Reserve about launching a central bank digital currency since it is a very important potential financial innovation according to FED Chair Jerome Powell so let’s read more today in our latest cryptocurrency news.
US Federal Chair Jerome Powell said that Congress will get guidance from the FED on how to implement the central bank’s digital currency. Speaking before the US House Committee on Financial Services, Powell added:
“I think it’s something we really need to explore as a country. We’re doing a great deal of work.”
He mentioned that once the guidance is finalized, it will be the responsibility of Congress to draft legislation authorizing the implementation in the US financial system. For many years, officials mulled over the idea of a digital currency backed by the US government and considered the risks and benefits. The implementation of the digital dollar could have a huge impact on the crypto landscape and can expose the entire population to the experience of conducting transactions by using digital currencies. Powell said:
“It’s a very important potential financial innovation that will affect all Americans. Our plan is to work on both the policy side and the technological side in coming years and come to Congress with a recommendation at some point.”
The FED was considering the digital dollar since 2017 and earlier this week, Congressman Jim Himes released a new proposal on how the US could issue and implement a CBDC claiming that it can help preserve the dollar’s role as a leading currency in the global economy. Powell continued:
“In light of the tremendous growth in crypto-assets and stablecoins, the Federal Reserve is examining whether a U.S. central bank digital currency would improve on an already safe and efficient domestic payments system. As the Fed’s white paper on this topic notes, a U.S. CBDC could also potentially help maintain the dollar’s international standing.”
It could still be time before CBDC finds its way into the American market. The timeline for a CBDC is close to a decade if not longer, according to Messari analyst Dustin Tender. He noted that with the delays in implementing the FED transfer system, it could take even longer. Given the research involved in creating a digital dollar, it will be long before people buy everyday items with the US CBDC.
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