US Treasury Secretary Yellen Says She Has Not Decided Whether Fed Should Issue Digital Currency – Bitcoin News

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U.S. Treasury Secretary Janet Yellen said she has yet to decide whether the Fed should issue a central bank digital currency (CBDC). “There are some advantages” to a digital dollar, Yellen said, but noted that “there are also significant costs.”

Janet Yellen hasn’t decided whether the Fed should develop a digital dollar

Treasury Secretary Janet Yellen said in an interview with Reuters Next on Thursday that she had not made up her mind on whether the Federal Reserve should create a digital dollar.

She explained that the decision would require a broad consensus between Congress, the central bank and the White House. The Treasury Secretary believes that more study is needed on the pros and cons of having a central bank digital currency (CBDC) in the United States, including its effects on the banking system. Yellen was of the opinion:

I see both advantages and disadvantages in doing so. And my own opinion is not made on this subject.

According to the Atlantic Council’s Center for Geoeconomics, 87 countries (accounting for over 90% of global GDP) are currently exploring a CBDC.

Federal Reserve Governor Lael Brainard called on the Fed to urgently develop a digital dollar. She said in July that she does not understand why the United States is not actively developing a central bank digital currency while China and other countries are. Brainard is President Joe Biden’s candidate for Federal Reserve Vice Chairman.

Yellen, who was the 15th chairman of the Federal Reserve from 2014 to 2018, said the U.S. central bank is expected to release a report soon detailing its work on a CBDC. She added that the Fed understands that consensus is needed to continue.

Nonetheless, the Treasury Secretary said that whether the Fed should develop a central bank digital currency was not discussed “seriously” in the White House, adding:

It is a decision which is important and which must generate a consensus. There are some advantages, but there are also significant costs… It can work to disintermediate the banking system. And, you know, we have to analyze the pros and cons. I have no sight yet.

Several Federal Reserve Governors fail to see the benefits of the Fed’s issuance of a digital dollar, including Governors Michelle Bowman, Randal Quarles and Christopher Waller. “I remain skeptical that a Federal Reserve CBDC would solve any major problem facing the US payments system,” Waller said recently.

In September, Federal Reserve Chairman Jerome Powell provided an update on the progress of the digital dollar study. He insisted that the Fed is not behind other countries on the central bank’s digital currency (CBDC).

What do you think of Janet Yellen saying she hasn’t decided whether the Fed should issue a digital dollar? Let us know in the comments section below.

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