Jerome Powell, the leader of the world’s most powerful bank has recently disclosed that upcoming central bank digital currencies would need to be integrated with other existing payment systems, meaning it will not replace cash but complement such medium.
“A recent report from the Bank for International Settlements and a group of seven major central banks, which includes the U.S Central Bank assessed the feasibility of CBDCs in helping central banks deliver their public policy objectives,” Powell said in a news report credited to Bloomberg.
What you need to know:
- The U.S government had earlier considered a framework in creating a U.S. central bank digital currency which would be mined through the blockchain protocol, transferred between users, and recorded in a public ledger.
- The digital dollars would be stored in a distributed database via the internet, on an electronic computer database, within a stored-value card or virtual files.
The U.S Fed Chief was making such remarks at a conference hosted by the Committee on Payments and Market Infrastructures, a group of global central bankers convened by the Bank for International Settlements.
“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. “And as this conference amply demonstrates, despite the challenges of this last year, we still have been able to make important progress.”
Recall many months ago, the world’s largest economy considered the use of digital dollars, following slow COVID-19 stimulus payments to its citizens. The U.S Congress recently heard testimonies on the usage of digital dollars to facilitate the U.S’ legacy financial infrastructure.