The Chairman of the Federal Reserve of the United States Jerome Powell has appeared in an online conference of the International Monetary Fund (IMF) on Monday, October 19, 2020, to discuss with other panelists the future of cross-border payments. However, Jerome Powell has not only talked about transactional payments but also he has touched on the topic of Central Bank Digital Currencies (CBDC) as well. Talking about CBDCs, he said that the United States (US) needs to get it right with a central bank digital currency than to be the first one to issue its centralized digital currency.
While sharing plans of the US regarding issuing a CBDC in the IMF-hosted conference, the Fed Chair said that the government of the United States has not planned to issue a central bank digital currency so far neither it has made any decision regarding this. He said that it is really crucial for the US to get things right with central bank digital currency before issuing it.
He is of the view that it is not more important for the United States to become the first country to issue a centralized digital currency rather explore it completely is more important. According to him, the US should explore first the benefits as well as risks involved in implementing a central bank digital currency in the country then it should go for the issuance of CBDC.
Furthermore, he said that risks associated with Central Bank Digital Currency such as financial stability, privacy, and cyber frauds, etc. need to be determined and resolved. No decision will be made by the central bank of the US regarding the issuance of a digital currency until these issues and risks are addressed completely. He emphasized that CBDC should need to be protected from illicit activities and use. Stating on ahead, he said that CBDC should ensure the privacy of users.
Powell then added that there are numerous central banks from across the whole world that are looking forward to issuing their respective central bank digital currencies and they all have their own motives behind this. However, the main motive of the United States is to find out the implications of a CBDC and whether or not it can make the financial payment system better.