Powell: Need for digital dollar is an Issue for Congress

Federal Reserve Chair Jerome Powell said the central bank is involved in a large-scale research and development project on the digital dollar and that questions of whether adopting such a currency would provide a public benefit have yet to be resolved. “It’s a very, very large, complex project. And, you know, this is just table stakes,” Powell said in an interview with “60 Minutes” on CBS. “This is understanding the technology and the possibilities so that you can address the policy issues.”

The interview with Powell was conducted on Wednesday and broadcast on Sunday. Millions of Americans already perform transactions with systems rather than through physical cash, and the Fed and private banks are moving ahead on real-time payments. Countries from China to Sweden are also testing digital currencies. Powell has said the US doesn’t need to be first, and he’s also noted that any introduction of a new currency format would require congressional input.

“We have not decided to do this because, again, the question is will this benefit the people that we serve?” Powell said on CBS. “And we need to answer that question well. And we need to involve the public and Congress deeply in that process because it would be an important step if we were to do this.”

Fed officials have also said they need to consider how a digital currency would interact with the banking system. Most households currently hold their money in regulated financial institutions with deposit insurance, access to the Fed for emergency liquidity, and other safeguards.