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Fed vice chair says the U.S. central bank is still in ‘early stages’ of a possible CBDC

Fed vice chair says the U.S. central bank is still in ‘early stages’ of a possible CBDC

The Federal Reserve is still in the early stages of investigating the viability of a digital dollar.

During Thursday’s House Financial Services Committee hearing, Randal Quarles, Vice Chair for Supervision at the Fed, said the central bank’s stance on a digital currency is still in the formative stages.

Rep. French Hill (R-AK) questioned Quarles on central bank digital currency (CBDC) during his time, asking how the Fed’s attitude has changed in recent months. French, among other lawmakers, first took an interest in a U.S. CBDC in 2019 when he sent a letter to Fed chair Jerome Powell on the subject. At the time, Hill said Powell’s response indicated the Fed wasn’t actively exploring a CBDC. 

Quarles said the Fed has long been interested in the possibilities of a CBDC, but this year’s rise in government-backed payment systems across the world has driven the central bank to take a closer look at a possible U.S. payment system.

“I still think it would be premature to say that we believe that this is a solution that the United States would need to implement. We’re weighing pros and cons, there are pilot projects in place. This is still in the early stages. I wouldn’t say we’ve changed our stance and believe that this is something the U.S. needs,” he said.

The Fed has been conducting research on CBDCs, looking at theory behind a digital dollar. The central bank released a report earlier this week on possible implications culled from other research.

© 2020 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Author: Aislinn Keely