SF Fed President: No Plans to Put USD on a Blockchain

But central banks will likely continue discussing government-backed digital currency, said John Williams of the Federal Reserve Bank of San Francisco.

Nov 30, 2017 at 7:00 p.m. UTC
Updated Sep 13, 2021 at 7:13 a.m. UTC

The Federal Reserve is not working on a cryptocurrency version of the U.S. dollar, the head of one of its regional banks said.

As first reported by Reuters, John Williams, president of the Federal Reserve Bank of San Francisco, offered his thoughts about the developments in distributed ledger technology and what its progress means for central banks.

Speaking at the 54th annual Economic Forecast Luncheon in Phoenix, Williams took a question from the crowd about what he thinks bitcoin's rise means for the economy, as shown in this Periscope video from the San Francisco Fed's account.

He answered by first pointing to the underlying blockchain technology's potential to improve the efficiency and security of payments, but then said:

"The other thing I think is interesting is this question of central bank-issued digital currency. Right now, the Federal Reserve is not developing its own digital currency, but there is a lot of research going on around the world thinking about this question."

Williams told the crowd that his remarks should not be construed as a suggestion of what the Fed might or might not do, but he does think government-backed cryptocurrency will remain a hot topic among central banks.

"I think this will be a very exciting area over the next decade," he said.

'Very premature'

This follows similarly tentative comments yesterday by Williams' counterpart at the New York Fed, William Dudley.

"I think at this point it’s really very premature to be talking about the Federal Reserve offering digital currencies, but it is something we are starting to think about," Dudley said at a quarterly public engagement event in New Brunswick, New Jersey, according to Bloomberg.

But economists at the Fed have been keeping an eye on this space since long before the recent run-up in bitcoin's price and media attention.

In a 2015 conversation with CoinDesk, David Andolfatto, a vice president of the St. Louis Fed, argued that bitcoin and the Fed are not really that different, saying that the central bank is in a sense open-source and all money is just a ledger of one form or another.

Portrait of John C. Williams via the San Francisco Fed website.


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