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FameEX Hot Topics | US Federal Reserve Chair Powell Shares Progress on Central Bank Digital Currency

2023-03-10 16:59:30

On Wednesday, the House Financial Services Committee held a hearing where Federal Reserve Chairman Jerome Powell was asked about the progress on a central bank digital currency (CBDC), also known as the digital dollar, by Congressman Stephen Lynch (D-MA), the Ranking Member of the Subcommittee on Digital Assets, Financial Technology and Inclusion.

Congressman Lynch expressed his interest in the Fed's work towards developing a CBDC and asked for an update on their progress. Chairman Powell responded by stating that the Fed has been actively studying the potential benefits and risks of a CBDC, and is currently conducting experiments to determine its feasibility.

Chairman Powell also emphasized the importance of considering various factors when deciding whether or not to issue a CBDC, including cybersecurity, financial stability, and the impact on monetary policy.

Congressman Lynch further inquired about the timeline for a potential launch of the digital dollar, to which Chairman Powell responded that there is no specific timeline at this point, and that the Fed is focusing on conducting research and experiments to determine the potential benefits and risks of a CBDC.

The topic of a central bank digital currency has gained increased attention in recent years, with several countries exploring the possibility of launching their own digital currencies. The potential benefits of a CBDC include increased financial inclusion, improved efficiency in payments systems, and better tracking of transactions.

However, there are also concerns about the impact on traditional banking systems, potential security risks, and the need for regulation. The Fed's continued research and experimentation on the issue will be crucial in determining the viability of a digital dollar and its potential impact on the US economy.

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