At least three Federal Reserve governors have said they see no reason for the Fed to issue a central bank digital currency (CBDC). The Fed is currently preparing a report on a digital dollar which will be released in the near future.
Fed governors doubt need for digital dollar
Federal Reserve Governor Michelle Bowman said last week that she didn’t really see a reason for the Fed to issue a US central bank digital currency given the security and efficiency of the US payments system. . She said:
I’m not really sure I understand or see the business case for creating it.
The Fed is currently preparing a report on the pros and cons of issuing a digital dollar. The report is expected to be published shortly.
Randal Quarles is another Federal Reserve Governor skeptical of the Fed’s issuance of a digital dollar. He said on October 20 at a Milken Institute conference that he did not understand the arguments for issuing a central bank digital currency. Quarles, who is due to step down in December, said:
Until someone answers me the question why, I don’t understand why we would devote the enormous amount of resources and the technological risk and the significant disruption to the current functioning of the financial system that would come from the central bank saying that we will provide this digital currency.
Federal Reserve Governor Christopher Waller also doubts the Fed should issue a digital dollar. He explained in October during a discussion hosted by the Official Forum of Monetary and Financial Institutions (OMFIF) that a digital dollar would put the Fed in direct competition with commercial banks.
“With a central bank digital currency, you are asking a very straightforward question. Should the central bank be more involved in processing payments to households and businesses so as to enable them to bypass the banking system? That’s what a CBDC account does, â€Waller said. “So, should we compete with the banking system or not? In August, the Fed governor noted:
I remain skeptical that a Federal Reserve CBDC would solve any major problem facing the U.S. payments system.
Do you think the Fed should issue a central bank digital currency (CBDC)? Let us know in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, nor a recommendation or endorsement of any product, service or business. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, good or service mentioned in this article.