Powell has previously said any CBDC should serve “as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks”.
“The introduction of a CBDC would represent a highly significant innovation in American money,” says The Fed in its much-anticipated report on the possible issuance of a U.S. digital currency. The 35-page discussion paper on a government-backed coin makes no firm conclusions on whether (making it clear it did not “favour any policy outcome” at this point) it should be issuing a CBDC, but instead solicits feedback (as Powell had previously explained would be its purpose). The bank in the paper said a digital dollar could bolster the financial system by ensuring the U.S. dollar remains the preeminent currency in the international financial system, improve cross-border payments and increase financial inclusion and ease the dollar’s use in new technology. Read more . . .