At an online Princeton University event, the US Federal Reserve chairman said on CDBCs, “We don’t have the urge or we don’t have to be the first.” “Effectively,” Powell continued, “we already have a first mover advantage because we are the reserve currency.”
Powell estimated it would be “years instead of months” for the Fed to publish a CBDC, despite early studies of digital dollar-friendly blockchains at the central bank’s outpost in Boston.
He added that the Fed is “investing heavily” in understanding the technology and examining the policy questions that CBDCs are asking.
Powell also admitted that it was the private sector’s ability to create private money (in other words, Bitcoin and other cryptocurrencies) that led the Fed to look into CBDCs.
“We know that in the past with private money [is created]The public sometimes just thinks of it as money, ”Powell said. “At some point they realize that it’s not money and that’s a really bad thing to avoid.”