US Treasury Secretary Janet Yellen said that she has not yet decided whether the Fed should issue a central bank digital currency (CBDC). Yellen said that the digital dollar “has some benefits,” but pointed out that “there are also some meaningful costs.”
Janet Yellen has yet to decide whether the Fed should develop a digital dollar
Treasury Secretary Janet Yellen said in an interview with Reuters at the next meeting on Thursday that she has not yet formed an opinion on whether the Federal Reserve should create a digital dollar.
She explained that the decision requires broad consensus among Congress, the Central Bank and the White House. The Secretary of the Treasury believes that more research is needed on the pros and cons of owning a central bank digital currency (CBDC) in the United States, including its impact on the banking system. Yellen believes:
I think there are pros and cons to this. And I have not made up my mind about this myself.
According to data from the Atlantic Council’s Geoeconomic Center, 87 countries (accounting for more than 90% of global GDP) are currently exploring CBDC.
Fed governor Lael Brainard called on the Fed to urgently develop a digital dollar. She said in July that she could not understand why the United States is not actively developing central bank digital currencies, while China and other countries are actively developing central bank digital currencies. Brainard is the vice chairman of the Federal Reserve nominated by President Joe Biden.
Yellen, who served as the 15th chairman of the Federal Reserve from 2014 to 2018, said that he expects the Federal Reserve to release a report soon detailing its work on CBDC. She added that the Fed understands that a consensus is necessary.
Nevertheless, the Secretary of the Treasury stated that the White House has not “seriously” discussed whether the Fed should develop a central bank digital currency, and elaborated:
This is an important decision that requires consensus. There are some benefits, but there are also meaningful costs…it can disintermediate the banking system. And, you know, we need to address the pros and cons. I have no opinion yet.
Several Fed governors Don’t look The benefits of the Fed’s digital dollar issue include Governor Michelle Bowman, Randal Quarles, and Christopher Waller. “I still doubt whether the Federal Reserve CBDC can solve any major problems facing the U.S. payment system,” Waller said recently.
In September, Fed Chairman Jerome Powell shared a latest progress Digital dollar research. He insisted that the Fed does not lag behind other countries in central bank digital currency (CBDC).
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