Federal Reserve Chairman Jerome Powell says the U.S. central bank is looking at whether to issue a digital dollar with a “very broad scope.” He noted that the Fed is collaborating with Congress and the executive branch on whether to issue a central bank digital currency.

Fed Chair Powell on Digital Dollar Progress

Federal Reserve Chairman Jerome Powell provided an update of the central bank’s digital dollar work Tuesday during a panel discussion on digital finance hosted by Banque of France.

“Cash is not disappearing here in the United States. We still use cash quite a lot,” he began. However, the central banker noted: “It is declining, not in absolute terms but compared to non-cash payments, it’s declining.”

Powell explained that the Federal Reserve is looking very closely at “the potential costs and benefits” of issuing a central bank digital currency (CBDC) in the U.S. He detailed:

We are looking at it very carefully. We are evaluating both the policy issues and the technology issues, and we are doing that with a very broad scope.

However, Powell clarified: “We have not decided to proceed and we don’t see ourselves making that decision for some time.”

The Fed chairman explained: “We see ourselves as working in collaboration with Congress … but also with the executive branch which brings expertise to many of the issues that we have to deal with here.”

He added, “At the end of the day, we will need approval from both the executive branch and Congress to move ahead with a central bank digital currency,” elaborating:

We see this as a process of at least a couple of years where we are doing work and building public confidence in our analysis and in our ultimate conclusion.

Noting that the Fed has not reached a decision on whether to issue a digital dollar, Powell concluded: “That’s where we are, we’ve got a lot of work to do.”

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