The Federal Reserve chair Jerome Powell has stated that a central bank digital currency version (CBDC) of the U.S. dollar will be significant in sustaining the dollar’s global dominance at a period other jurisdictions are increasingly researching the currency.
Powell revealed that the U.S. is already exploring other use cases of a digital dollar, like improving the local payment system in line with the evolving global financial system, he said during the International Roles of the U.S. Dollar on June 17.
According to Powell, the focus on a digital dollar has also been inspired by the growth of cryptocurrencies and stablecoins.
“In light of the tremendous growth in crypto-assets and stablecoins, the Federal Reserve is examining whether a U.S. central bank digital currency (CBDC) would improve on an already safe and efficient domestic payments system. A U.S. CBDC could also potentially help maintain the dollar’s international standing,” he said.
Protecting the dollar’s status
In protecting the dollar’s standing, Powell noted there is a need to promote the currency as a global store of value.
Baltrusaitis, J. (2022, June 17). Fed’s Powell says a U.S. CBDC could maintain the dollar’s international standing. Finbold. Retrieved June 22, 2022, from https://finbold.com/feds-powell-says-a-u-s-cbdc-could-maintain-the-dollars-international-standing/