Fed Governor Voices Caution on Central Bank Digital Currencies

Central bank-issued digital currencies could stifle private-sector payments innovation, a senior Federal Reserve official said today.

Federal Reserve board governor Jerome Powell took critical aim at the concept of a central bank-issued digital currency during a roundtable event focused on blockchain and the future of financial markets and hosted at Yale Law School, at which he gave an afternoon keynote address.

After discussing blockchain technology more broadly – echoing past remarks and research publications from the US central bank – Powell honed in on the subject of the so-called CBDC. Several institutions of its kind, especially the Bank of England, have pursued possible applications in the area in the past year and a half. Central banks in China, Sweden and Singapore, among others, have also investigated this use case.

In remarks, Powell raised questions about the technical and privacy issues he argued could impede such an effort, positing that such a system “would be a global target for cyber attacks, cyber counterfeiting, and cyber theft”.

What’s more, he went on to argue, these efforts could crowd out private-sector approaches to new payments tools.

Powell told event attendees:

“Indeed, I would expect private-sector systems to be more

Read more ... source: CoinDesk

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