Fed Reserve to launch its CBDC development research paper soon: Jerome Powell

NEW DELHI: Fed Chairman Jerome Powell told a press conference on September 22 that the Federal Reserve will soon launch its research into the costs and benefits of a central bank digital currency.
The Federal Reserve held a two-day meeting on September 21 to discuss the outlook for employment and inflation in the United States and structure a policy that could bring central banks closer to supporting the economy, Reuters reported .
The Boston Fed and the Massachusetts Institute of Technology (MIT) have collaborated on multi-year research to explore viable technology to create a CBDC. The first phase of the research will begin soon.
Powell said the Fed will thoroughly assess the viability of developing and launching a CBDC. The priority of the US payment system right now is to ensure stability and reliability, he added.
Powell conveyed the following government priorities for research and development to the CBDC:
* The most important parameter will be to ensure that the clear and tangible benefits arising from the CBDC outweigh the costs and risks involved.
* The research paper will address some of the public policy issues around a CBDC and set the stage for the central bank to solicit comments from lawmakers and the public on the issue.
* The CBDC issued by the US central bank would be different from cryptocurrencies because it could give its owner a direct claim on the central bank just like physical money. However, the structure of the future digital currency has not been decided.
Powell said the Fed is proactively working on the CBDC and doesn’t want to rush in and follow other countries moving in that direction.
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