The United States Federal Reserve is still evaluating the prospects of introducing a central bank digital currency (CBDC) for the country but says it has not yet decided on the matter.
Speaking at a news conference on Wednesday, Powell stated that the Federal Reserve was studying the merits of creating a digital dollar and has plans to issue a paper on the matter.
“We are working proactively to issue a CBDC and if so, in what form,” Powell stated while fielding questions at the news conference, adding:
“We think it is our obligation to do the work both on public policy and technology to form a basis for making an informed decision. The ultimate test we will apply when assessing a central bank digital currency and other digital innovations is, 'Are there clear and tangible benefits that outweigh any cost and risks?'”
Despite several central banks launching their own CBDCs, Powell declared that the Fed was not in a hurry to join the trend.
According to the Fed Chair, the emphasis is not on speed but on getting things right while stating that the U.S. was not behind the curve on CBDC innovation.
CBDCs have come to the fore in the anti-crypto narrative espoused by global banking regulators and government policymakers.
As previously reported by Cointelegraph, banking giant HSBC has recently come out in support of CBDCs against cryptocurrencies and stablecoins.
Indeed, crypto critics in Washington like Senator Elizabeth Warren have clamored for CBDCs as “legitimate digital public money” compared to crypto, which the Senator has been known to condemn.
Earlier in September, Wall Street Journal columnist James Mackintosh argued that CBDCs could trigger “deeply negative interest rates.”
Fed governor Chris Waller has previously argued against the value proposition of CBDCs, calling them “a solution in search of a problem.”