The Federal Reserve is “looking very carefully” into a digital dollar
In his remarks for the Senate Banking Committee, Federal Reserve Chairman Jerome Powell mentioned that a digital dollar was a “high-priority” project.
However, at this stage, the central bank is still assessing the benefits of launching it as “significant” policy technical and policy issues are yet to be resolved:
We are looking very carefully about whether we should issue a digital dollar.
Powell once has reiterated that it’s more important for the Fed to be right than to be first:
As the reserve currency, we have the responsibility to get this right rather than be the first.
Speaking of stablecoins, he mentioned that they wouldn’t have a significant effect on the monetary policy.
Inflation is still too low
The Fed chair also signalled that monetary easing wouldn’t be scaled back since inflation remains “soft”:
The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved.
In addition, Powell said that he had no idea whether there were any asset bubbles.
Bitcoin and tech stocks are getting hammered hard among an ongoing sell-off after long-duration government bond yields suddenly rallied.