WASHINGTON–Fed Chairman Jerome Powell is expressing caution around the future of digital currency.
During remarks in a recorded video at a Bank of International Settlements event, Powell said any digital currency offered by a central bank “needs to coexist with cash and other types of money in a flexible and innovative payment system.”
Powell also emphasized a finding from a recent report by a group of global central banks, reported the New York Times.
Powell said that the Fed has been experimenting with central bank digital currencies, and that the Federal Reserve Bank of Boston was collaborating with researchers at the Massachusetts Institute of Technology on “complementary efforts.”
“But the Fed has been a relatively slow mover when it comes to digital currencies, arguing that as the steward of the U.S. dollar, which is central to the global economy, it needs to move carefully rather than quickly when it comes to embracing the emerging technology,” the Times reported.
FedNow Service is Coming
The U.S. central bank is working on modernizing the payment system in other ways, including its FedNow service, on which CUToday.info has reported and which is set to begin in 2023 or 2024. The service, details of which were released midway through 2020, is meant to offer round-the-clock processing and advanced security features. The goal is to streamline the nation’s clunky money transfer system, which can now take several days to clear checks and move funds into recipients’ accounts, the Times explained.
“The COVID crisis has brought into even sharper focus the need to address the limitations of our current arrangements for cross-border payments,” Powell said.