Washington The Federal Reserve on Thursday began a review of the potential benefits and risks of issuing a US digital currency, as central banks around the world experiment with a potential new form of currency to keep pace with private sector payment innovations.
Fed officials are divided on the matter, making it unlikely they will make a decision on creating a digital dollar anytime soon. Unlike private cryptocurrencies such as bitcoin, a fed version would be issued and backed by a US central bank, a government entity, as are US paper dollar bills and coins.
The central bank called Thursday’s long-awaited report the first step in a discussion of whether and how a US digital dollar could improve secure and effective domestic payments systems. The paper does not endorse any policy outcome, and the Fed said the release of the report is not meant to indicate an imminent decision.
“We look forward to engaging with the public, elected representatives and a wide range of stakeholders as we examine the positives and negatives of central bank digital currencies in the United States,” Federal Reserve Chairman Jerome Powell said in a statement.
The Fed will collect comments on the report for 120 days. The Fed said it would only proceed to adopt such an offer with the support of the country’s elected leaders.
Advocates say the Fed digital dollar could make it faster and cheaper to move money around the financial system, bring people who lack bank accounts into it and provide an efficient way for the government to distribute financial aid. could.
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