“This is a very important potential financial innovation that will affect all Americans.” Powell said the Fed’s plan is to work on the policy side and the technology side of the (digital dollar) over the next few years and at some point to Congress propose.
Powell also pointed out that if the U.S. is to launch a digital dollar, it must be issued by the government, not a private company.
“One of the questions about CBDCs is, do we want private stablecoins to eventually become digital dollars? I think the answer is no,” Powell said, saying that if the U.S. is going to have a digital dollar, it should be government-backed, not a private currency.
On the cryptocurrency side, at Wednesday’s meeting, three senators questioned Powell about the regulation of cryptocurrencies, pointing to the accounting treatment of digital assets and the current collapse of the crypto market.
“We are tracking these events very carefully,” Powell said, adding that the Fed has so far not seen a major macroeconomic impact from these events.
Powell also emphasized that the U.S. needs a better regulatory framework for crypto assets.
“The same financial activity should have the same regulation wherever it occurs. But that is not the case now, because many digital financial products are in some ways very similar to those that exist in the banking system or capital markets, but the way they are regulated It’s not the same, so we need to do that (have a better regulatory framework),” Powell said.
