Federal Reserve Chair Powell Emphasizes Substance Over Speed on Digital Dollar

The chairman of the US Federal Reserve, Jerome Powell, says he is focused on execution rather than speed when it comes to developing a US central bank digital currency.

While testifying virtually before the House Financial Services Committee, Powell says the US dollar’s reserve currency status offers the digital dollar a first-mover advantage.

“I’m really concerned about getting this right. It does carry risks, it does have benefits, it’s quite specific to the institutional context of each country, and I want to get it right.

We are the reserve currency. We have first-mover advantage by virtue of that. So I think it’s way more important to get it right than it is to do it fast.”

Powell also says that the Federal Reserve will launch a report on the wider digital payments space in the coming months and will embark on a public consultation process touching on the CBDC and other crypto assets.

“We expect to publish a report … could be early September or plus or minus right in that time frame… We’re going to address digital payments broadly. So that means stable coins, it means crypto assets, it means the CBDC.

That whole group [of issues] and payment mechanisms, which we think are really at a critical point in terms of the appropriate regulation, and in the case of … a central bank digital currency, laying out questions for the public to respond to about what good it can do, what the costs and benefits of it would be.

We want to begin a major public consultation across many different groups, including Congress of course, on a CBDC. And also on stable coins and crypto.”