The Federal Reserve will soon publish research on a central bank digital currency in terms of costs and benefits, according to Bank President Jerome Powell.
According to Arab Net, Powell said after the conclusion of the two-day Federal Reserve Monetary Policy Committee meeting: We are actively working to assess the possibility of issuing a digital currency to the central bank, and if we are going to do so, in what form will it be?
The final decision will depend on whether there are clear and tangible benefits that outweigh any costs and risks, he added.
The world's largest central banks are jumping on the digital cash bandwagon, trying to fend off emerging threats from cryptocurrencies and make payment systems more seamless.
Central bank digital currencies are essentially electronic money. Like traditional cash, it gives its holders a direct claim from the central bank and allows companies and individuals to make electronic payments and transfers.
Central banks fear losing control of money issuance and payment systems in favor of cryptocurrencies, such as Bitcoin or even the digital currency backed by Facebook Diem.
The proliferation of forms of payment that are not supervised by any central or public body may weaken central banks' grip on the money supply, and thus economic stability, as the threat becomes deeper With the increasing adoption of cryptocurrencies.
As we are using less physical money, the central bank digital currency seeks to ensure that individuals have access to central bank money.
