Private entities will not design the central bank’s digital currency. This is the opinion of the head of the Fed. Jerome Powell finally commented on the digitized dollar.
Jerome Powell on the digital dollar
Federal Reserve Chairman Jerome Powell, speaking to the Financial Services Commission, said the idea of the digital dollar – a blockchain-based version of the current world reserve currency – is complex. He added that the Fed takes him seriously, but all this requires further research. Asked if private companies would take the initiative, he replied that he believed that they would not play any role in the design of the digitized dollar:
“I think this is something that central banks need to design. The private sector is not involved in creating the money supply, it is something that the central bank does. “
We remind you that the Digital Dollar Project concept has already been created, which was published by the former chairman of the Commodity Futures Trading Commission, J. Christopher Giancarlo. According to it, the Fed would issue a “new” dollar, but the currency would be designed in cooperation with the private sector.
Powell said public opinion may not be open to the idea that private entrepreneurs should be responsible for the money supply.
However, he is in favor of the vision.
“If it’s something that will be good for the US economy and for the world’s reserve currency, or the dollar.”
There is also the other side of the coin
Powell also confirmed some concerns about the implementation of the tokenized version of the dollar on the market.
“It is our duty to understand this well and not to wake up one day and realize that the dollar is no longer the global reserve currency, because we have just missed a technological change. We will not allow this, but at the same time we must answer some very serious questions before we want to introduce the digital currency of the central bank. “
At the same time, the largest US international rival, China, is currently testing the digital version of the yuan. It is carried out in several Chinese cities. Recently, even screens appeared on the network, which show what the mobile wallet application of the project looks like.