WASHINGTON—In remarks to the International Monetary Fund (IMF) annual meeting, Federal Reserve Chairman Jerome Powell discussed cross-border payments and digital currencies.
Powell has expressed concerns in the past over digital currencies, calling Facebook’s Libra Project, for instance a “wake-up call.”
"There are a number of ways that a CBDC (Central Bank Digital Currency) might improve the payments system, and it is mainly this area that motivates our interest," said Powell during the meeting, identifying a principal reason as to why a CBDC may come to the United States in the future.
As CUToday.info reports separately, China has recently concluded its largest-ever test of digital currency after the city of Shenzhen issued 10 million yuan in digital currency to 50,000 randomly selected citizens. Those selected were able to spend these digital funds “at 3,389 merchants in Luohu District.”
According to Powell however, each country has to carefully consider their own stance on CBDCs, with the Fed chairman expressing concerns around cyber issues and privacy issues.
"For the Federal Reserve, our main focus is on whether and how a CBDC could improve an already safe, effective, dynamic and efficient domestic payments system,” Powell said.
In addition, Powell said that the United States, unlike other jurisdictions, already has a highly banked population. "We have a highly banked population so that many—although not all—already have access to the electronic payments system."
"We do think it's more important to get it right than to be the first," Powell added.