WASHINGTON – The Federal Reserve has left the financial markets somewhat in suspense about whether the central bank is serious about issuing its own digital currency. But some clarity could be right around the corner.
The Fed is set to release a report next month detailing its thinking about a digital dollar, financial stability concerns regarding private stablecoins and other policy questions related to the digital payments sphere.
While the paper would likely kick off a further process of public dialogue and internal policymaking rather than bring resolution, many expect the Fed to use the report to signal whether the digital dollar will be a reality.
“The first thing they’re going to have to decide is, do we go ahead with this at all?” said Mark Carey, co-president of the Global Association of Risk Professionals and a former Fed official.
Read Also
- Corrida: Five questions to understand the bill to ban it Nov 17, 2022
- SNCF strike: “Slightly disrupted” traffic to be expected for the first holiday weekend Dec 14, 2022
- Cryptocurrency : South Korea vs. the US May 30, 2021
- Cryptocurrency : Edward Snowden says $ 6 trillion in stimulus is good for Bitcoin May 30, 2021
- Schumacher, the first retreat is never forgotten | FormulaPassion.it Sep 26, 2021
- Gazprom suspended gas supplies to the Netherlands and supplies to Denmark are also in danger May 30, 2022
- The new rise of crypto scams traces the old pyramid fraud Jul 24, 2021
The market will also be looking for signs of the Fed’s expectations for private stablecoin issuers and how the central bank would address privacy concerns about a digital dollar, among other concerns.
Many in the private sector have warned that a Fed digital currency could threaten other stablecoin issuers, since consumers would prefer the safety of central bank support. The report could recommend steps for private issuers to take to inform users about which assets back their stablecoins in order to compete with the government.
According to one observer, Fed Chairman Jerome Powell “has been very clear in saying, ‘I want to do [a central bank digital currency] right rather than do it fast. ‘”
Bloomberg News
“This report could be a shot over the bow: Here’s what the Fed intends to do on a digital currency and if you want your currency to survive or coexist with a central bank digital currency, you’re going to have to be as transparent, perhaps, as the Fed intends to be, “said Bruce Mizrach, a professor in the economics department at Rutgers University.