Nearly every time an elected official has asked U.S. Federal Reserve Chairman Jerome Powell about the digital dollar, he’s emphasized caution and risk to the stability of the U.S. financial system.
Wednesday, however, Powell went further while speaking before the House Committee on Financial Services, saying the U.S. central bank would “engage with the public” on the digital dollar this year, giving a timeline to the central bank digital currency’s development for the first time.
“This is going to be an important year,” Powell said of the digital dollar project. “This is going to be the year that we engage with the public pretty actively including some public events that we are working on, which I’m not going to announce today.”
Powell emphasized that the Fed won’t make decisions and then present them to the public but will talk with Americans about the trade-offs involved with the digital dollar project.
“There are both policy questions and technical questions that relate between those two and they’re very challenging questions,” Powell said. “We’re going to have a public dialogue … in the meantime we’re working on technical challenges and also collaborating and sharing work with other central banks around the world.”
Beating a familiar drum, Powell also emphasized the central bank would be careful about designing a digital dollar that doesn’t “undermine … healthy market function.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.