U.S. Federal Reserve Chair Jerome Powell said an anticipated Fed report on central bank digital currencies (CBDC) would come in early September, during a Wednesday hearing before the U.S. House Committee on Financial Services.
In response to a question from ranking member Patrick McHenry (R-N.C.), Powell said the report will outline the benefits and risks of CBDCs, as well as cryptocurrencies and stablecoins more broadly. In the hearing, Powell reiterated that stablecoins need regulation if they are going to play a major part within U.S. payments networks.
“Stablecoins certainly have some advantages in terms of faster payment systems and have some attributes of CBDCs but there are some risks with stablecoins right now,” Powell said. “I think the issue is that stablecoins are a lot like money market funds or bank deposits or a narrow bank.”
Powell had previously said the report would be published in July.
The Boston branch of the Federal Reserve announced last year it was conducting research into what a possible CBDC would need to be useful within the U.S., and that it is expected to write the document.
In response to a question from Rep. Stephen Lynch (D-Mass.), Powell added the dollar’s status as the world’s reserve currency isn’t in danger of being threatened, even as other countries develop CBDCs.
The chairman also added that digital currencies could replace decentralized digital assets.
“You wouldn’t need stable coins you wouldn’t need cryptocurrencies if you had a digital U.S. currency, I think that’s one of the stronger arguments in its favor,” Powell said.
