The chairman of the Dallas Federal ReserveRobert Kaplan believes the US Federal Reserve should start working on a digital currency right away. a clear indicator that some politicians see this as a priority issue.
Speaking Tuesday November 10 at a Bloomberg virtual conference, Kaplan apparently said:
“It is of the utmost importance that the Federal Reserve focus on developing a digital currency in the months and years ahead.”
The central banker’s observations were part of one wider debate on economic and fiscal policy.
Kaplan is a member of this year’s Federal Open Market Committee (FOMC), the organization responsible for setting monetary policy. The 2020 committee lowered interest rates Recorded lows in March of this year as part of a synchronized political response against Covid-19. Kaplan and the rest of the FOMC have been instrumental in flooding the market with liquidity since September 2019. when overnight irregularities in the buyback market led to a short-term rise in interest rates.
Blockchain technology is certainly on politicians’ radar. Last month, the Chairman of the Federal Reserve, Jerome Powell said 80% of central banks around the world are considering the possible use of a CBDC. While the Fed has given no indication of whether it will attempt to develop a digital dollar, the central bank has hired various economists to examine the CDBC issue in more detail.
Monday, The Fed published a literary review of central bank digital currencies (CBDCs). examine the impact of a digital dollar on commercial banking and monetary policy. The review ended with a recommendation to conduct additional research to examine the “intrinsic” value drivers of a government-backed digital currency.
In August, The Fed released a full research report comparing the digital dollar to other payment methods.
Although the idea of a CBDC is mocked by supporters of truly decentralized digital currencies like Bitcoin, Some believe that the digital dollar is the natural progression towards a cashless society. That can help Governments should encourage financial innovation, improve solvency, and encourage greater financial inclusion around the world.