Fed Chair Powell’s Sensational Comment On Crypto

U.S. Federal Reserve Chair Jerome H. Powell made quite a statement on the future of CBDCs in the U.S. financial system. Powell made the comments on Fed crypto stance on Friday at a research conference on the role of U.S. Dollar. Sponsored by the Federal Reserve Board, Washington, DC, the conference discussed the topic “International Roles of the U.S. Dollar.”

Rapid Changes In Global Monetary System

Powell said changes in the global economy could potentially impact dollar’s role in the world. In the future, rapid changes taking place in the global monetary system may affect the international role of the dollar, he said.

The Fed Chair threw some light on global adoption of a round the clock instant payments ecosystem. A majority of the big economies have already adopted or kept in the loophole the new payments mechanism. He added that the Federal Reserve’s FedNow service would be coming online in 2023.

U.S. CBDC For Domestic Payments

Also, in an encouraging sign for the crypto community, Powell acknowledged the rapid growth in crypto-assets and stablecoins. He further stated that a U.S. central bank digital currency (CBDC) is also being examined for implementation.

“And in light of the tremendous growth in crypto-assets and stablecoins, the Fed is examining whether a CBDC would improve on an already safe and efficient domestic payments system. As the Fed’s white paper on this topic notes, a U.S. CBDC could also potentially help maintain the dollar’s international standing.”

The Fed Chair noted that the Fed would look at how the global financial system might evolve over the next decade. Besides, the current state of the world economy will also be assessed from the paper’s feedback, he explained. “The paper will provide important insights on this issue.”

In his opening remarks, Powell said the U.S. Dollar defined the international financial and monetary system that emerged after World War II. The dollar’s international role holds multiple benefits, particularly for the U.S., he added.

In March this year, the Fed Chair said the U.S. is not ignoring the rising crypto adoption. He noted that crypto could become another reserve currency. Meanwhile, Phil Geiger, a crypto enthusiast, said Powell’s comments were a huge thing. “Huge admission of defeat. Bending the knee to knee and attempting to innovate.”

Anvesh reports major announcements around crypto adoption by institutions and popular personalities. Having been associated with the cryptocurrency industry since 2016, Anvesh is a strong advocate of decentralized technologies. Follow Anvesh on Twitter at @AnveshReddyBTC and reach out at anvesh (at) coingape.com

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