Janet Yellen (U.S. Treasury Secretary) says that the Fed has yet to decide whether it should issue a central banking digital currency (CBDC). “There are some benefits” to a digital dollar, Yellen said, but noted that “there are also meaningful costs.”
Janet Yellen has not decided if the Fed should develop a digital dollar
During a interview Thursday at the Reuters Next conference, Janet Yellen stated that she had not yet formed an opinion regarding whether or no the Federal Reserve should create a new digital currency.
The decision will require broad agreement among Congress, central banks and White House. She believes more research needs to be done on the pros and cons of using a digital currency from the central bank in the United States, as well as its impact on the financial system. Yellen opined:
There are pros and cons. My own opinion isn’t completely clear about the matter.
According to the Atlantic Council’s Geoeconomics Center, 87 countries (representing over 90% of global GDP) are currently exploring a CBDC.
Lael brainard, Federal Reserve Governor has urged the Fed’s urgent development of a digital dollars. She stated in July that the U.S. does not have a central bank digital currency, while China and other nations do. Brainard is President Joe Biden’s nominee to serve as vice chair of the Federal Reserve.
Yellen was the Federal Reserve’s 15th Chair from 2014-2018. She stated that the U.S. central banking will soon release a report on its efforts to create a CBDC. She stated that the Fed is aware that consensus is essential to continue.
Nonetheless, the treasury secretary said the issue of whether the Fed should develop a central bank digital currency has not been discussed in a “serious way” at the White House, elaborating:
This is a decision that’s important and needs to command consensus. There are some benefits, but there are also meaningful costs … It can work to disintermediate the banking system. We need to weigh the pros and cons. I don’t have a view yet.
Many Federal Reserve Governors don’t see digital dollars as a benefit, such as Randal Quarles and Michelle Bowman. “I remain skeptical that a Federal Reserve CBDC would solve any major problem confronting the U.S. payment system,” Waller recently said.
Federal Reserve Chairman Jerome Powell updated us in September about the status of the study on digital dollars. He emphasized that the Fed does not trail other countries in central bank digital currencies (CBDC).
Do you agree with Janet Yellen’s statement that the Fed shouldn’t issue a digital currency? Comment below to let us know your thoughts.
Images CreditsShutterstock. Pixabay. Wiki Commons
DisclaimerThis article serves informational purposes. It does not constitute an offer, solicitation, or recommendation of any company, products or services. Bitcoin.com is not a provider of investment, tax, legal or accounting advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.