Fed chief says, more important for U.S. to get digital currency right than be first

In any development of a cross-border digital currency, it is more important for the United States “to get it right than be first,” U.S. Federal Reserve Chair Jerome Powell said on Monday. “We do think it's more important to get it right than to be first and getting it right means that we not only look at the potential benefits of a CBDC, but also the potential risks, and also recognize the important trade-offs that have to be thought through carefully,” Powell said in a panel discussion on digital payments hosted by the International Monetary Fund. “Just to mention a few, I would mention the need to protect a CBDC from cyber attacks, counterfeiting and fraud, the question of how a CBDC would affect monetary policy and financial stability, and also how could a CBDC prevent illicit activity while also preserving user privacy and security.” Powell said that while the Fed has made no decision yet on issuing a digital currency, it is an active participant in research into the prospect in partnership with other central banks and the Bank for International Settlements. “Complementary efforts are also now underway, for example through the Federal Reserve Bank of Boston, which, in collaboration with researchers at MIT, is developing a hypothetical central bank digital currency.” The world's largest central banks, and even some of the smaller ones, are toying with the idea of issuing digital currencies.