News of central bank-backed digital currency continues to come from around the world, and China has stepped up work on this. It is remarkable that the US and the Federal Reserve remain silent in the meantime. In his speech at the event organized by Princeton University, Jerome Powell made some statements in response to all these.
The digital dollar can take years to complete
Powell pointed out that the US does not need to be the first in the field of central bank-backed digital currency and added:
“Because we are the reserve currency, we already have the first mover advantage.”
Powell made a similar statement to European Central Bank Governor Christine Lagarde, who recently spoke and stated that years are required for the digital euro. Stating that the time expectation for the digital dollar should be long, Powell stated that it will take “years, not months”. In addition to these, the President emphasized that the FED has made significant investments to understand cryptocurrency and blockchain technologies.
Private sector generating money enabled CBDCs to be investigated
Powell, who made an important confession, emphasized that due to the “ability of the private sector to produce private money”, they decided to take a look at the central bank digital currency element. Stating that the private sector produced “money” in the past, Powell emphasized that the public sometimes perceived it as money. The experienced economist, who says that users at some point “realized that this is not money,” thinks this is a “very bad thing” that should be avoided.
