Jerome Powell, Chairman of the U.S. Federal Reserve System, spoke today at an International Monetary Fund event on cross-border payments. The main message of Powell's speech is that the U.S. will not issue a national digital currency until all related issues are resolved.
The head of the Federal Reserve said he was not concerned about the achievements of other countries seeking to take advantage of the pioneer.
"We have not yet decided to release CBDC and we think we still have a lot of work to do. I think CBDC is one of those issues where it's more important for the U.S. to do it right than to be first," he said.
Powell explained that by "do it right" he means the need to assess not only the benefits of the instrument, but also the risks, especially in light of the status of the U.S. dollar as a global reserve currency.
The head of the Federal Reserve emphasized that different states are guided by their own considerations in the development of the CBDC, and in the case of the U.S. the focus should be on whether and how the CBDC can improve an already safe and active payment system.
"Unlike some other jurisdictions, here in the U.S. we continue to see a strong demand for cash. Moreover, we have reliable and well-established financial and banking sectors, and people who have free access to banking services, so many, though not all, have access to electronic payment systems," he said.
Powell stressed that the U.S. will not release digital currency until all risks in the context of cybersecurity, financial stability and privacy are eliminated.
"In addition to evaluating the benefits, there are quite complex political and operational issues. I will mention just a few of them: the need to protect the CBDC from cyberattacks and fraud; how the CBDC will affect monetary policy and financial stability; and how the CBDC will help prevent illegal activities while maintaining privacy and security for users," Powell added.