Federal Reserve Chairman Jerome Powell said Monday that the U.S. central bank is actively exploring the launch of a fully digital dollar and would move to adopt such an offering only with the support of the nation’s elected leaders.
To adopt a fully digital dollar, “we would need buy-in from Congress, from the Administration, from broad elements of the public,” Mr. Powell said. Most importantly, “we would not proceed with this without support from Congress, and I think that would ideally come in the form of an authorizing law, rather than us trying to interpret our law to enable this,” he said.
Mr. Powell’s comments came as part of a virtual event held by the Bank for International Settlements on central bank digital innovation. He appeared with Jens Weidmann, leader of the Deutsche Bundesbank and member of the European Central Bank’s Governing Council, and Agustín Carstens, general manager of the BIS.
The Fed leader repeated in his comments that the U.S. is only at the beginning of its efforts to explore what a digital dollar might be, and that its work is not intended to disrupt the private financial sector, nor is it driven by the rise of private offerings like bitcoin. Many supporters of private cryptocurrencies seek to supplant government offerings, but Mr. Powell said that so far, these offerings aren’t doing that.
Private cryptocurrencies are “not really useful as a store of value and they’re not backed by anything,” unlike the current dollar which has the support of the Fed, Mr. Powell said. “They’re more of an asset for speculation, so they’re also not particularly in use as a means of payment. It’s more a speculative asset that’s essentially a substitute for gold, rather than for the dollar,” he said.
