Positives of a Possible New Digital Currency
No one is immune to the rise of cryptocurrency, including the federal government. The Fed is currently evaluating whether it would make sense to create a national digital currency and what it would look like.
The Fed Is Considering a Digital Currency
In late September, Fed Chairman Jerome Powell said that the Fed is still evaluating whether it will create a digital currency of its own. While the Fed hasn’t made any decisions yet, they do have plans to release a paper outlining their research in the near future.
Other Countries Have Similar Ideas
The United States is far from the only country to consider a digital currency from the central bank. Other countries, from the Bahamas to China, have already created their own currencies.
The Fed Continues Cautiously
Despite the fact that other countries are further along in creating new digital currencies, the Fed does not feel any pressure to speed up its efforts, according to Powell. He says that the Fed prioritizes completing the process properly instead of doing it quickly. They want to make an informed decision.
Benefits of a Possible New Digital Currency
With the Fed strongly considering a new digital currency, it stands to reason that there are many potential positives from creating one.
One of the biggest positives in the eyes of proponents is the ability to quickly send payments. This would be particularly helpful during times of crisis. This would be part of the Fed’s goals of maintaining a stable payment system to help the public.
A new digital currency would also address the issue of the unbanked, providing them with services.
There is also the fact that a digital currency from the central bank would not face some of the issues of Bitcoin and other cryptocurrencies. Namely, it would have full regulation, be accepted widely, and function similarly to dollars.
The caveat is that the Fed would need the approval of congress to create such a currency, as the regulatory framework is not currently in place.