Federal Reserve Studying Plans for Digital Currency

The United States Federal Reserve is showing more signs that it is moving forward with efforts to establish its own official digital currency.

The Fed announced on Thursday that it plans to publish a research paper in the summer that explores the prospects of issuing a digital currency, CNBC reported.

“The effective functioning of our economy requires that people have faith and confidence not only in the dollar, but also in the payment networks, banks, and other payment service providers that allow money to flow on a daily basis,” the Fed Chair, Jerome Powell, said.

According to the Chairman, the Fed is carefully monitoring and adapting to the developments in the digital currencies and payments domain.

“Our focus is on ensuring a safe and efficient payment system that provides broad benefits to American households and businesses while also embracing innovation,” Powell added, commenting on the announcement.

“Technological advances also offer new possibilities to central banks, including the Fed,” he noted.

“While various structures and technologies might be used, a CBDC could be designed for use by the general public.”

Powell also revealed that the Fed is committed to hearing a wide range of voices on this important issue before making any decision on whether and how to move forward, “taking account of the broader risks and opportunities it could offer. The paper represents the beginning of what will be a thoughtful and deliberative process.”

Last October, Powell said that it is more important to get it right than to be first, when discussing issuing a digital currency by the central bank, explaining getting it right by not only looking at the potential benefits of a digital currency, but also the potential risks.

Then in February, he went on to tell the House of Representatives that the Fed might need congressional approval before issuing a digital Dollar.