Fed's Jerome Powell: Digital dollar may require some congressional approval
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FILE PHOTO: Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee hearing on "The Quarterly CARES Act Report to Congress" on Capitol Hill in Washington, U.S., December 1, 2020. Susan Walsh/Pool via REUTERS
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(Reuters) - Federal Reserve Chair Jerome Powell on Wednesday said some form of congressional authorization may be needed for the central bank to proceed with any development and roll-out of a digital version of the U.S. dollar.
The Fed expects this year to be an important one for the development of a digital U.S. currency, Powell said in response to a lawmaker's questions during testimony before the House Financial Services Committee, especially in its engagement with the U.S. public on the matter.
The Fed and a number of other monetary authorities and governments around the world are working to develop digital versions of their so-called fiat currencies, partially in response to the rapid growth of alternatives such as bitcoin.
Powell said the Fed this year will be looking at the "challenging" policy and technical issues associated with a digital version of the dollar, a matter made more complex by the dollar's status as the world's reserve currency. The Fed will be careful that its actions do not undermine the functioning of key markets that are largely priced in dollars, he said.
