FameEX Hot Topics | Update on Central Bank Digital Currency Progress Shared by US Federal Reserve Chair Powell

During the House Financial Services Committee hearing held on Wednesday, Congressman Stephen Lynch (D-MA), who serves as the Ranking Member of the Subcommittee on Digital Assets, Financial Technology and Inclusion, inquired about the status of the central bank digital currency (CBDC), known as the digital dollar, from Federal Reserve Chairman Jerome Powell.

Congressman Lynch showed his keen interest in the development of CBDC and requested an update on the Fed's progress. In response, Chairman Powell stated that the Fed has been actively analyzing the potential benefits and risks of a CBDC and is currently conducting experiments to determine its feasibility.

Chairman Powell also highlighted the importance of considering various factors such as cybersecurity, financial stability, and the impact on monetary policy when deciding on the issuance of CBDC.

Further, Congressman Lynch asked about the possible launch timeline for the digital dollar. Chairman Powell responded that no specific timeline has been set yet, and the Fed is currently focused on researching and conducting experiments to assess the potential benefits and risks of CBDC.

Several countries are exploring the possibility of launching their own digital currencies, and the topic of CBDC has gained increasing attention in recent years. Potential benefits of CBDC include improved efficiency in payment systems, increased financial inclusion, and better tracking of transactions. However, concerns about the impact on traditional banking systems, potential security risks, and the need for regulation also exist.

The Fed's continued research and experimentation on the issue will be crucial in determining the feasibility of a digital dollar and its potential impact on the US economy.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.