Although the US Fed does not appreciate digital currencies, it cannot stand aside. Creation of a digital dollar is an inevitable event and the regulator perfectly understands this. It has long been carrying out experiments to find out possible consequences of the implementation of digital currencies in payment ecosystems.
The political side of the issue is the only thing that prevents the US Fed from introducing the digital dollar. The regulator is actively getting ready for the possible issue of the digital currency. The fact is that the People’s Bank of China has already performed the first trials and announced that the digital yuan would be tested in several new regions.
A digital currency developed by the Fed is a "high priority project for us," Powell told Congress. He also added that there are "significant technical and policy questions" related to a digital US dollar. Powell stressed that the US does not have to be first in issuing a digital dollar, but it needs "to get it right." "This is something we're investing time and labor in, across the Federal Reserve system," Powell said.
Jerome Powell emphasized that it was necessary to solve the issue so that they could avoid a negative influence on the banking system. “You want to avoid creating things that might be destabilizing or draw funds away from the banking system,” Powell said.
