Is The Federal Reserve Releasing A Fedcoin?

Issue 63

A statement from Federal Reserve Chairman Jerome Powell on Monday revealed that the U.S. central bank is considering the release of a fully digital dollar that some call “Fedcoin” (the name is subject to change).

Mr. Powell has acknowledged the already existing cryptocurrencies, such as bitcoin, and explained that while bitcoin has no real use when it comes to purchasing power, Fedcoin will be entirely backed by the U.S. government, which will allow it to be used as a means of payment.

Advocates for Fedcoin argue that it would speed up real-time payments, as well as speed up government stimulus payments that have become more prominent during the pandemic.  Those who oppose Fedcoin argue that a digital currency would give the government the ability to bring monetary policy interest rate changes directly to the consumer.

Regardless of the pros and cons of a national digital currency, Fedcoin appears to be far from release.  The U.S. central bank will only release Fedcoin with the support of the country's elected officials.  The central bank also has no intention of rushing the project, Powell stated that, “we don’t need to be first to market, the real threshold question for us is does the public want or need a new digital form of central bank money to complement what is already a highly efficient, reliable and innovative payments arena and system.”

Source: Wall Street Journal