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Jerome Powell added that the Federal Reserve needs to consider the health of other markets when creating a digital currency.
Federal Reserve hair Jerome Powell said 2021 will likely have the central bank engaging with the public and lawmakers regarding the digital dollar.
In a House Financial Services Committee hearing today, Powell responded to questions from Rep. Patrick McHenry, who said the digital dollar would likely face national and economic security issues for the United States. Powell said there were many concerns surrounding the project and the Fed intended to reach out to the public.
âThis is going to be the year in which we engage with the public pretty actively, including some public events that weâre working on,â he said. âIn the meantime, weâre working on the technical challenges and also collaborating and sharing work with the other central banks around the world that are doing this.â
Powell added that the Fed needed to consider the health of other markets when creating a digital dollar, adding that the project may need to go to lawmakers first:
âWe could well need legislative authorization for such a thing. It isnât clear until we see which way weâre going.â
The Fed chairâs remarks come on the heels of his appearance before the Senate Banking Committee yesterday, in which he said the Fed was âlooking carefullyâ at whether the U.S. should roll out a digital dollar, but also that it was unlikely for stablecoins and digital currencies to affect monetary policy transmission. Powell has previously said that it is âcritical that the Fed focuses on developing a digital currency.â
In the meantime, the Federal Reserve faced another technical challenge today, as nearly all of the services it provides through its online portal went offline for more than an hour. At the time of publication, all Federal Reserve Bank Services with the exception of Account Services are now back online.
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