Five pilot programs will gather data on a digital dollar in the United States over the next 12 months.
Former OCC acting comptroller Brian Brooks claimed that cryptocurrencies like Bitcoin “actually are backed by something.”
Jerome Powell added that the Federal Reserve needs to consider the health of other markets when creating a digital currency.
A CBDC is a central bank digital currency, a new type of money governments are experimenting with that often has blockchain at its core.
The proposal games out CBDC scenarios for fundamentally different potential digital currency end users.
“It’s something we’re studying … [T]his is really a decision which sits as much with the Fed as it does with Treasury,” said Deputy Secretary Justin Muzinich.
U.S. citizens appear to be opposed to a digital dollar despite expressing concerns over the existing financial system.
The Federal Reserve is actively investigating the potential impact of a digital dollar, though it has no plans to issue one anytime soon.
The digital dollar again appeared during a Senate hearing. However, it wasn’t the focus of the hearing, but rather just another tool that can be used to maintain U.S. hegemony.
Digital dollars can promote a more inclusive financial system, or they can contribute to already-growing economic inequality in the U.S.