Federal Reserve Chairman Jerome Powell has stated that a central bank digital currency (CBDC) could improve the current payment system in the United States but that there also potential pitfalls to address as well.
Jerome Powell made this assertion during the International Monetary Fund (IMF) panel discussion on cross-border payments. According to him, the Federal Reserve’s interest has been drawn towards digital currency because of the potential to improve the U.S. payment system, stating, “it is this area that motivates our interest.”
The U.S. Federal Reserve chairman also noted that a CBDC could upgrade the country’s payment infrastructure, reach people who have historically been underserved by banks and lending institutions, and potentially enable cheaper and faster payment transactions.
He further noted that the Fed was open to partnering with private firms on improving the current payments system and CBDCs. He did emphasize that the Fed has currently not set any plan in motion towards launching one as “there’s a great deal of work yet to be done as well as extensive public consultation to be had with all stakeholders before making such a decision.”