A recent statement from Federal Reserve Chair Jerome Powell came illustrating the fact that it is not true for every country to work following the same approach for digital currencies. One has to make it work following their own country’s rules and regulations. Since there are privacy and surveillance risks with government-issued digital currencies.
It is not a case of any one country where advocates are not arguing on the importance of Central Bank Digital Currencies and the banking sector. The adoption of CBDC allows cross-border transactions a lot easier and promotes financial inclusion with payment system stability. With the rapid development of the digital sector, each country is trying to make use of the asset according to their situations and capabilities.
China’s Approach Would not Work in The U.S, Jerome Powell
Federal Reserve Chair Jerome Powell on Wednesday made a controversial statement, comparing China and the United States on their take on projects associated with the digital currencies. The statement reads:
“China’s rapid development of a digital version of the yuan will not push the Federal Reserve to rush its own digital currency project. China’s approach would not work in the United States.”
“It is far more important to get it right than it is to do it fast,” further adding that, “The currency that is being used in China would not work here. It allows the government to see every payment for which it is used in real-time.”
The Latest Policy Meeting by Fed
The recent policy meeting by the Fed emphasized the primary goal of the Fed. The authority is not rushing to speed the market but rather avoiding any catastrophic and misleading step in executing the digitalization of the dollar.
The central bank of the U.S. is also taking its own sweet time to understand the potential of digital assets. According to Powell “Strategy includes making sure the technology is being used in a way that makes sense for the country and the people who rely on the dollar as the world’s reserve currency.” “Central bank digital currencies are now possible,” and “We need to understand whether that is something that would be a good thing for the people that we serve.”