Cryptocurrency media outlets are abuzz about the Federal Reserve of the United States reviewing the merits of a possible digital dollar project.  This move is expected to change the dynamics of the financial industry.

The Federal Reserve is set to explore how the digital currency will affect the economy of the country.  Even if the Federal agency reviews the possibilities, it does not have regulatory powers to ensure implementation.  The disputes regarding the merits of the digital dollar by Federal officials is continuing.

Those who advocate the idea of digital dollar have to state that it would make international transactions easy. They also point to how the digital dollar will introduce financial markets to the unbanked.

The United States being an economic power house should have stepped in to this decision far earlier; however, they are stepping up their efforts regarding CBDCs only after other countries have already stepped in.

In the past:

Jerome Powell, Fed Chair:  In our very modern advanced economy with fast and efficient full blown payment system would be adding a digital currency actually benefits the public that we serve? That is the question that we are asking.

We are working very hard on that. We are also doing quite a lot of technological experiment.  Technology has made this a possible thing. And, so we feel it is our obligation to understand it.  How would it work? What would the features be? What are the subtle policy choices and design choices that you have to make? We are doing all that.

We have not made a decision to do this, because again the question is, will this benefit the people that we serve, and we need to answer that question well, and we need to involve the public, and the congress deeply in that process. It will be an important step through if we do this.

Question:  But given the fact that the final decision has not been made.  You are doing, if I understand correctly, the software development and even graphic design on what a digital dollar would look like actually?

Jerome Powell, Fed Chair:  Yes, we are doing lots and lots of work.   We are doing stuff jointly without the Central Banks. We are doing stuff at the Boston Fed and many other regional Feds have lot of other projects going on.  Here at the board, we have a group of people who are doing software development, and that kind of thing. You know this is really just table stakes understanding technology and the possibilities so that you can really address the policy issues.

You think it is likely?

Answer:  I think it is possible.