About Digital Dollar, Head of Fed Says “We Are Almost There”
Jerome Powell, the head of Federal Reserve has updated the public about the “Digital Dollar” project development and said that “We are almost there”. He also denied that there is some kind of marathon amongst states for launching their official digital currencies but if there was any such race then America is not falling behind but in fact going shoulders to shoulders with others.
United States of America was criticized by its own people for not being able to produce “Digital Dollar” while others had. The criticism was further fueled when China not only developed its Digital Yuan but also launched it successfully. People are genuinely assuming that there is some kind of marathon going on amongst states for launching their digital currencies. However, this assumption of the race was specifically denied by Jerome Powell, the man who is heading the US Federal Reserve as its Chairman.
He was talking to the media on 22nd September 2021. He informed that the decision of introducing digital dollars for US citizens is still pending and hasn’t been considered yet. He was then asked by CNBC’s reporter to state at what stage America’s digital project is. In response, he said that the project is underway and the Government wants the digital dollar to be a “well-balanced” digital currency. There is no point in launching the US’s CBDC while the issuer is not sure of its stability, said Powell. He then suggested that the project is almost complete and those who think that US is lagging behind others are wrong.
Powell argued that since digital dollar is going to involve public money, then the Government will need to be extra-cautious. Therefore it is important that a strong regulatory structure equipped with technology and innovation has to be put in place. He said that Federal Reserve cannot sacrifice innovation at the altar of necessity. In this regard, Powell opined that these days various private virtual currencies and products are developed and launched in the market. The Fed is closely monitoring them all to judge when and in what particular form, it has to issue Digital Dollar.
The US “digital dollar” project is a kind of CBDC which is known as “Central Bank Digital Currency”. Although there are more than thousands of digital currencies, yet they are not primarily issued by central banks. However, in the case of CBDC, it is exclusively issued by a central bank and therefore is backed by the national fiat of a country. The first-ever CBDC introduced in the world was “Sand Dollar” i.e. the digital currency of the Bahamas. It was launched in the year 2020 and since then about 83 countries of the world are interested in the CBDC project.
Currently, 5 CBDCs are available in the world and 14 CBDCs are undergoing rigorous pilot testing. At least 16 CBDCs projects are currently under-development phase.