Specialists of the US Federal Reserve (FRS) analyzed various studies of digital currencies of the Central Bank and published a report on the results.
According to a report by FRS researchers, before launching the digital dollar, it is necessary to give a clear answer to the most important question: will the state cryptocurrency become a full-fledged replacement for fiat money and bank deposits? It does not matter who will issue the digital dollar – a private company or the Central Bank itself.
The Fed began exploring the possibility of issuing its own stablecoin back in February. However, the department believes that in order to fully understand the principles of digital currencies and assess their possible consequences for the country’s monetary system, it is necessary to take into account the developments of both individual researchers and central banks.
After analyzing various reports on digital currencies from central banks, the Fed notes policymakers’ concerns that government stablecoins may replace the main source of bank financing. After the launch of such digital currencies, there will be no need for the services of commercial banks, which in turn will lead to a reduction in their lending. On the other hand, government digital currencies will increase access to financial services for people who do not have a bank account and cannot use basic financial services.
After examining different points of view on this topic, the specialists of the US Central Bank recognized that the digital dollar can act as an instrument of the country’s monetary policy. The Fed is scrutinizing digital dollar use cases and their possible implications for the US economy. The decisive factor for the issuance of the state digital currency is its flexibility so that the state can quickly respond to macroeconomic shocks. To do this, it is necessary to identify how the digital dollar will differ from conventional means of payments and savings.
Last month, Fed Chairman Jerome Powell said the digital dollar was not a top priority for the country. It is much more important to carry out a number of versatile studies and eliminate all the associated risks so that the launch of the digital currency does not take place “in a hurry.” Additionally, Powell said last year that the benefits of the digital dollar are not yet clear.
