Federal Reserve Chairman Jerome Powell in a statement said, ‘You wouldn’t need cryptocurrencies if you had a digital US currency’
“I think that’s one of the stronger arguments in its favour,” he said. Moreover, the Fed chairman maintains that the US is not in risk of losing its status as the world’s reserve currency.
Federal Reserve Chairman Jerome Powell discussed cryptocurrencies, stablecoins, and a digital currency during a congressional hearing before the Financial Services Committee of the United States House of Representatives on Wednesday.
Rep. Stephen Lynch of Massachusetts asked during the hearing whether a “rapid action” on the Federal Reserve’s digital currency would “calm” the markets and whether a digital dollar would be a more viable option to hundreds of cryptocurrencies or stablecoins emerging in the payments system.
“I believe that is the case. That, I believe, is one of the reasons made in favour of digital currency,” Powell responded, elaborating:
You would not require stablecoins or cryptocurrencies if you had a digital US money. That, I believe, is one of the more compelling arguments in its favour.
Powell added, in response to a related inquiry, that stablecoins are similar to money market funds or bank deposits “but without the regulation.” He stated: “In this nation, we have a tradition of storing the public’s money in what is meant to be a very safe asset.
We have a fairly robust regulatory system in place for bank deposits and money market funds, for example. That is not true for stablecoins.”
Rep. Lynch also expressed concern about the “slowness” with which the digital currency is developing, noting that various central banks globally are making progress in this area faster than the US.
Powell responded, “I think this is the beginning of an accelerating decision process. We have a lot of work left to do on the technical side and on the policy side, but a critical part of it is just public consultation.” He stated emphatically, “I thinik it’s way more important to get it right than it is to get it fast.”
Additionally, the Fed chairman addressed Lynch’s fears about the US losing its standing as a reserve currency. “On reserve currency, the U.S. is the reserve currency,”
Powell still being insistent added:
There really isn’t a good competitor out there. All the things you need to be a reserve currency, the United States has it … We are not in danger of losing it, certainly not to China.