Innovation

Feds to consider digital currency

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May 25, 2021

The U.S. Federal Reserve recently announced its intentions to develop a digital currency. Chairman Jerome Powell said in a statement that this currency would not replace cash.

"Technology now enables the development and issuance of central bank digital currencies, or CBDCs. A CBDC is a new type of central bank liability issued in digital form," Powell said in the video. "While various structures and technologies might be used, a CBDC could be designed for use by the general public."

The Federal Reserve Board will release a paper this summer to give its current thoughts on the risks and benefits of CBDC.

"We are committed at the Federal Reserve to hearing a wide range of voices on this important issue before making any decision on whether and how to move forward with a U.S. CBDC, taking account of the broader risks and opportunities it could offer," Powell said. "The paper represents the beginning of what will be a thoughtful and deliberative process."