U.S. Federal Reserve explores the creation of a digital currency

This Thursday it was learned that the Federal Reserve System of the United States is evaluating the benefits of issuing a digital currency, as well as the risks that this would imply for the economy of the country.

According to statements by Jerome Powell, president of the Federal Reserve Board, the nation “is exploring the development of a central bank digital currency (CBDC) and what problems and risks it could represent.”

The statements were issued at the request of the representatives of the United States, French Hill and Bill Fosters, on whether the Federal Reserve planned to launch a national CBDC.

According to Powell, the agency is in the testing process based on small-scale research that allows it to gain practical experience as well as a better understanding of the opportunities and limitations of a national digital currency.

Without a doubt, one of the most delicate topics is the legal aspect. Powell stressed that the Federal Reserve is aware of the importance of such matter, in addition to “monetary and payment policies, financial stability, supervision and operational problems, and its vulnerability to cyber attacks.”

The president of the Federal Reserve Board stressed that if it is designed financially transparent to provide safeguards against illegal activities, “a general purpose CBDC may require the Federal Reserve to keep a record of all payment data using the digital currency […] and sometimes that poses problems related to data privacy and information security.”

Hill expressed his enthusiasm for Powell’s letter and said that if this happens it would have profound implications for the entire US financial system.

M.Pino

Source: Cointelegraph