Blinken to visit Israel, West Bank, May 26-27, source says


Powell Seeks Contributions As Fed Grows Interested In Digital Currencies

(Bloomberg) – Federal Reserve Chairman Jerome Powell has increased the volume of the digital US dollar debate, announcing that the central bank will release a research paper and solicit public comment as it considers one. publish one in the future. Reserve to hear a wide range of voices on this important issue before making any decision on whether and how to move forward with a US CBDC, ”he said in a statement Thursday, referring to central bank digital currencies. “To help stimulate broad debate, the Federal Reserve Board will be releasing a discussion paper this summer outlining our current thinking on digital payments, with particular emphasis on the benefits and risks associated with CBDC in the American context. ” The announcement, during a week of intense cryptocurrency volatility, kicks off a Powell-style consensus-building exercise on the theme of the US digital dollar, which until now was primarily a tech project based out of its regional branch of Boston. The approach of soliciting outside voices has been a hallmark of Powell’s leadership. Powell said he wanted the Fed to play “a leading role” in the development of international standards. Central banks around the world – notably the People’s Bank of China – are advancing with digital currencies, which could give them a head start on how standards evolve in part because they have real-world experience. “It’s hard not to see today’s statement. in the context of China and what’s going on in the private crypto markets, ”said Derek Tang, economist at LH Meyer / Monetary Policy Analytics in Washington. “There is a bit of complacency about the Fed saying, ‘We are the reserve currency’. This is changing now. Tang said China’s digital currency aims to exert more control over the domestic financial system but also to project soft power into the global trading system with digital yuan payments. “These efforts have accelerated perhaps faster than what the United States expected,” he said. A key issue for Powell and other Fed officials is how this technology would fit into the current U.S. banking system, which already provides electronic payments in a variety of systems Critics of the current system say it locks down many low-income people and their bills for basic services that people with high account balances do not suffer from. Digital currency accounts held by individuals could serve as a form of competition. Yet the banking system offers high protection to depositors, including insurance, which a less regulated system cannot provide. “Fix the system” “The problem is that we are too dependent on the central bank’s payment system, which fails to deliver,” said Aaron Klein, senior researcher at the Brookings Institution in Washington. Long payment times for cashing checks can lead people in underbanked communities to resort to payday lenders who charge high fees for cash advances. “The answer is to fix the Fed system and move society to a better payments system,” he said. U.S. central bankers want to be clear about the problem they are solving when they value a digital dollar. “Our main objective is to find out if and how a CBDC could improve an already safe, effective, dynamic and efficient situation. US domestic payment system, ”said Powell. “We believe it is important that any potential CBDCs can serve as a complement, not a replacement, for current private sector cash and digital forms of dollar, such as deposits in commercial banks.” Powell said that “to date cryptocurrencies have not been a convenient way to make payments, given, among other things, their fluctuations in value. He also said stablecoins, or digital currencies tied to the dollar, would attract more attention from regulators. He said he hoped the document would represent a thoughtful process. in developing international standards for CBDCs, actively collaborating with central banks in other jurisdictions as well as with regulators and supervisors here in the United States throughout this process. (Updates with commentary from analysts Tang and Klein in the fifth and ninth paragraphs.) Subscribe now to stay ahead with the most trusted source of business news. © 2021 Bloomberg LP

Source link

About Valerie Wilson

Check Also

ACRES COMMERCIAL REALTY CORP .: Important modification of the rights of the holders of securities, modifications of the articles of inc. Or bylaws; Change in fiscal year, other events, financial statements and documents (Form 8-K)

Article 3.03 Significant modification of the rights of security holders At May 19, 2021, as …

Leave a Reply

Your email address will not be published. Required fields are marked *