Although developed economies such as the European Union, the United Kingdom, Japan, and Canada have begun to develop central bank digital currencies, the progress of the United States is relatively lagging, and within the Federal Reserve, doubts about central bank digital currencies (CBDC) have never stopped.

On Monday local time, Fed Vice Chairman Quarles and Richmond Fed Chairman Barkin unanimously expressed doubts about the necessity of CBDC, which shows that the Fed is still cautious about CBDC.

Quarles stated at the Utah Bankers Association’s annual meeting that the launch of a US CBDC must set a high threshold, and the potential benefits should outweigh the risks. The vice chairman of the Federal Reserve in charge of supervision believes that the U.S. dollar is highly digitized, and whether CBDC can enhance financial inclusion and reduce costs is still doubtful. Some of these problems may be better solved by other means, such as increasing the cost of low-cost bank accounts. Use experience.

Barkin expressed similar views at the Rotary Club of Atlanta. In his view, the United States already has a digital currency, the US dollar, and many transactions are done through digital means such as Venmo and online bill payments.

Although lagging behind other major economies, the Fed has also begun to step up efforts to explore the possibility of launching CBDC. The Federal Reserve will release a report on the benefits and costs of CBDC this summer. The Federal Reserve Bank of Boston is working with the Massachusetts Institute of Technology to study technologies that can be used for CBDC. Related papers and open source code will be released in the third quarter. However, Fed Chairman Powell made it clear that if Congress does not take action, the Fed cannot launch a CBDC.

As some countries are actively developing CBDC, discussions in the United States are heating up. Some analysts have warned that this shift may threaten the status of the US dollar. In this regard, Powell said that the United States will not rush to launch CBDC, and it is more important to make comparisons.

In this regard, Quarles believes that as a global reserve currency, the US dollar is unlikely to be threatened by foreign CBDCs. He also emphasized that the cost of issuing CBDC may be very high, which may hinder the financial innovation of private companies and pose a threat to the banking system that relies on deposits to issue loans.

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