March 28, 2024

US Congress calls on Fed to develop digital dollar

US Congress calls on Fed to develop digital dollar

US Congressman Bill Foster points to chairmanFed Jerome Powell to the fact that the dollar may soon lose its status of a global means of payment due to the launch by China and other countries of the digital currency of the central bank (CBDC).

At a monetary policy hearing, Bill Fosterasked Powell's opinion on whether the launch of the digital dollar will help strengthen the position of the American currency as the core of the state and global financial system.

The Fed Chairman avoided a direct answer, saying that having a single means of paymentis important for the economy as a whole, but the impactdigital currency to strengthen positions remains an open question. He added that at present, each central bank is closely monitoring the development of this area.

Then the congressman asked about the abilityThe US will respond to the competitive threat posed by the digital renminbi, which China can scale with its existing mobile payment system.

To this, Jerome Powell replied that the US and China have different views on the CBDC.

During the hearing, Bill Foster expressed hisconcerns that the government is not responding to other countries' plans to launch national digital currencies that could give them a competitive advantage. He also pointed to the threat to dollar hegemony due to China's intentions to switch payments with some countries to the digital yuan.

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