Jerome Powell: CBDCs will not replace fiat

The head of the Federal Reserve (Fed) Jerome Powell said that central bank digital currencies (CBDCs) will not replace ordinary money, but will coexist with it.

Remarks by Chair Powell: https://t.co/gxa8YtRPKb Watch live: https://t.co/V9IFqKcYGY

— Federal Reserve (@federalreserve) March 18, 2021

During a speech at a conference on virtual payments, Powell noted that improving the global payments system should be driven not only by the public sector, but also by the private sector.

“CBDCs must coexist with cash and other forms of currency in a flexible, innovative payments system,” said the head of the Fed.

According to him, the Board of Governors is experimenting with CBDCs together with the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology.

In November 2020, Christine Lagarde, head of the European Central Bank, said that the regulator will not rush to launch its own CBDC. If a decision is taken, it could take two to four years.

In January 2021, Powell described regulating stablecoins is more important than issuing the U.S. digital dollar. According to him, American authorities are not eager to be the first in the world to issue a CBDC, because they have already been pioneers, having created the global reserve currency.

Earlier in March, the chair of the U.S. Senate Committee on Banking, Sherrod Brown, urged the Fed to explore the possibility of issuing a digital dollar. He believes the agency should become a leader in CBDC.

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