- Panelists before a Fed conference said that there is no urgent need for a CBDC.
- They said that CBDC development by other countries tends to focus on the retail sector.
- Earlier, Fed Chair Jerome Powell said the US Congress will eventually receive guidance from them on CBDC.
Panelists during the Federal Reserve’s recent conference on the US dollar on Tuesday appears to be less than impressed with the underlying technology of a CBDC, claiming that there is no urgent need to move ahead with the digital currency.
The Inaugural Conference on the International Roles of the US Dollar saw economic advisers and Fed’s top brass converge to discuss digital assets and whether a CBDC is beneficial for the western power.
Despite the Federal Reserve’s willingness to explore the digital asset, suggesting to “explore [CBDC] as a country, panelists weren’t as convinced.
The Fed note reads:
Panelists generally agreed that technology by itself would not lead to drastic changes in the global currency ecosystem.
The note also adds that the “rule of law, stability, network effects, and the depth of markets are crucial for the advantages held by dominant [reserve] currencies” like the US dollar.
It was also generally agreed that the development of CBDCs by other countries has the tendency to be focused on retail sectors for “speculative purposes,” thus posing no threat to the US dollar’s “international status.”
Notably, some countries, including Sweden, India, Nigeria, and China, among others, are already researching the utility of CBDCs, with China releasing its digital renminbi, and launching a digital wallet in January.
Two weeks ago, Fed Chair Jerome Powell said the US Congress will eventually receive guidance from them on CBDC. He said that once the guidance is finalized, it will be up to Congress to draft legislation authorizing its implementation in the country’s financial system.