Jerome Powell says crypto and a US CBDC would coexist
Cryptocurrencies and a US central bank digital currency can coexist, according to comments made by Federal Reserve Chair Jerome Powell.
The Fed chair said this when answering a direct question on the topic from Sen. Pat Toomey during Powell’s re-nomination hearing on Capitol Hill.
The lawmaker wanted to know if there was anything that would prevent the coexistence of a Fed digital dollar and stablecoins.
According to Business Insider, Powell responded with a “no, not at all.”
His response suggests that if Congress okayed a CBDC and Fed were able to launch one, nothing would “preclude a well regulated, privately issued stable coin from co-existing” within the same financial system as the digital dollar.
An example would be USD Coin (USDC), a US dollar-pegged stablecoin launched by Circle and Coinbase.
Crypto report ready
Powell also said that the long-overdue report on digital currencies should be out soon, putting the timeline towards that within weeks.
He told Sen. Mike Crapo that the report on cryptocurrencies was ready and that the delay in releasing it was largely down to monetary policy adjustments.
He noted that coming up with the report was a tough task and that the agency “didn’t get it quite to where [it] needed to get it.” However, it’s now ready for publication.
“The report really is ready to go and I would expect we will drop it, I hate to say it again, in the coming weeks, but it really is in a situation where it’s ready to go,” the Fed Chair reiterated.
According to Powell, the structure of the engagement with the report will mainly constitute “asking questions and seeking input from the public,” and not merely taking predetermined positions on issues.
But that doesn’t mean that the Fed wouldn’t be taking positions, he added.
Powell said in December that he didn’t think crypto posed any threats to the stability of the US financial system. He also earlier told Congress that the Fed was not looking to take China’s route and ban cryptocurrencies.