Lawmakers Want to Know Fed’s Plans For US Digital Currency, “It Is Inevitable” Says Philly Bank Pres
- US Congress members concerned about the “primacy of the US Dollar”
- Central bank digital currency “inevitable” but not in the near future: Patrick Harker
Will the US Federal Reserve jump onto the digital currency bandwagon?
According to Philadelphia Federal Reserve bank president Patrick Harker, it’s “inevitable.” However, he said the United States should not be the first one to make such a move.
“Frankly I don’t think we should be the first mover as a nation to do this,”
Harker said at a community banking conference on Wednesday.
“It is inevitable … I think it is better for us to start getting our hands around it,” he added.
In response to a question about the Fed’s decision to create is own real-time payments system, Hacker said the service is in the works,
“I am looking at the next five years after that. What comes next? I do think it is something around digital currency.”
Congress Members Concerned about the “Primacy of the US Dollar”
Central banks around the world are debating how blockchain technology might impact the traditional central banking and further creating their own central bank digital currency (CBDC).
Just earlier this week, Congress members Bill Foster and French Hill wrote a letter to Chairman Powell of the Fed, asking if it is actively developing a US dollar digital currency.
As a central bank, it is mandated that it provides a safer, more flexible, and more stable monetary and financial system while pointing out its ability and natural role to develop a national digital currency.
The Congress members further vocalized their concern for the “primacy of the US Dollar” which they said is in
“long-term jeopardy from wide adoption of digital fiat currencies.”
It has been further pointed out that 40 countries around the world are looking into developing a digital currency, as per the Bank for International Settlements’ report.
Not just minor economies like Sweden and Uruguay are involved in creating digital fiat currencies, China is developing one and Christine Lagarde, nominated to be the president of EC also assessed whether central banks should go beyond regulation cryptos and develop individual national digital currencies of their own.
Moreover, JPMorgan had already created one while Well Fargo will begin piloting its own crypto project.
“The Facebook/Libra proposal, if implemented, could remove important aspects of financial governance outside of US jurisdiction,”
the letter reads.
Now, the Congress members want to know how the Fed will respond to the fiat digital currencies and what are the market risks, benefits, and detriments of a US digital currency.