US central bank developing digital dollar ― Fed’s Powell reveals

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The central bank is researching a possible cyber-dollar, but will move slowly to ensure it first addresses the risks of and counterfeiting, Federal Reserve Chair Jerome Powell said Monday.

“This is one of those issues where it’s more important for the States to get it right than it is to be first,” Powell said during a panel discussion at the IMF annual on central bank digital currencies (CBDC).

“And getting it right means we not only look at the benefits of a CBDC, but also the risks,” such as cyber- and counterfeiting, he said. There is growing interest among the world’s central issuing official digital currencies, driven partially by concerns a private actor — such as Facebook’s Libra project — might get there first, without controls on how it is designed or used. ALSO READ: : Court gives Ndume 21 days to produce Maina But Powell said the Fed has a need to be cautious since the dollar is a global reserve currency, used by companies and central worldwide. “We have a responsibility both to the and to the world any steps taken for a digital currency be taken safely.” “We’re absolutely committed to the soundness of the dollar into safe and efficient dollar payment systems,” he said, but relies on the “reliable rule of law, strong and transparent institutions, deep financial markets and an open capital account.” The Boston Federal Reserve Bank is working with researchers at the prestigious Massachusetts Institute of to develop a “hypothetical central bank digital currency” to help assess risks, he said. [AFP]