Jerome Powell, current chairman of the United States Federal Reserve System (FED), stated that this year the FED would engage with the public to discuss the digital dollar, as it is a high priority issue for the federal entity.
During his participación on the House Committee on Financial Services, Banking, Housing and Urban Affairs, the current Chairman of the Federal Reserve and member of the Board of Governors of the Federal Reserve System of the United States, Jerome Powell, spoke about the United States' interest in creating a digital currency CBDCIn the past, Powell has spoken of a “hypothetical” digital dollar that would allow federal entities and U.S. regulators to evaluate its benefits and implications within the country’s financial system. However, in his most recent appearance, the official referred to a much more real digital dollar, which could arrive soon, when the FED begins to interact and engage with the public this year.
Although the FED president also stated that it is not yet clear in which direction they are going regarding the creation of the digital dollar, he did make it clear that 2021 will be an important year for the development of this project, considered a “high priority” for the country.
“This will be the year in which we engage with the public quite actively, including some public events that we are working on.”
With these statements, Powell points out that the advantages and benefits of digitalization can no longer be ignored, and recognizes that a digital dollar will help build a new, more inclusive, efficient and secure financial system. The current Treasury Secretary, Janet YellenAlso recognized recently the advantages of technology blockchain to issue its own CBDC, despite the official's strong criticisms of Bitcoin.
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From a hypothetical dollar to a more real one
Although Powell maintains that the current US financial system is robust and works in line with the nation's development plans, he does not rule out the possibility of integrating a digital currency to strengthen its banking and financial system.
Since last year, the FED acknowledged that it is working on the development of a digital dollar together with the Massachusetts Institute of Technology (MIT); although, as already mentioned, he always spoke of a hypothetical currency created for internal testing within the entity. Now, for the first time, the country's central bank spoke of the possible development of a real currency, which will be consulted with the American public to find out the opinion of all parties interested in the development of this project, and to reach agreements that guarantee the stability of the country's financial system. Powell was very careful to say that the introduction of a digital dollar should not undermine the healthy functioning of its current financial system.
Financial inclusion
Both Powell and Yellen agree that a digital dollar will foster financial inclusion for unbanked citizens in the country, who do not have access to banking products, such as accounts, cards, credits, among others. This is a situation that would be much easier to solve with a digital dollar than in the traditional way. In recent statements to the New York Times, Yellen he pointed that the problem of financial inclusion can be solved with the digital dollar, “I think it could lead to faster, safer and cheaper payments”, said the current Treasury Secretary.
The Treasury and the Fed may thus be forging an alliance to develop a real digital dollar, and also join the dozens of countries already working on developing their own central bank digital currency (CBDC).
Fall in FED services
Less than two days after Powell's remarks in the House of Representatives, most of the Fed's transfer services were interrupted by an operational error, which kept the entity's services offline for more than an hour. This happened recently according to Jim Strader, an official of the Richmond Fed Bank, although at the time of writing this article all services are up and running. operational.
The momentary collapse of all the FED's transfer systems, which occurred at the same time, reflects some of the problems that come with the centralization of the systems.
Finally, as the United States prepares to discuss the launch of a digital dollar with the public and stakeholders, in Canada, VersaBank announced the launch of a stablecoinCalled VCAD, which will be backed by the Canadian dollar, and can be exchanged for the country's legal currency.
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