Federal Reserve Chair Says China’s Central Bank Digital Currency Will Not Work In the United States

The Federal Reserve of the United States’ Chairman mentioned that the country is not in haste to create its centralized digital currency irrespective of the obvious advancement of China. He then revealed that the approach for the creation of the Chinese digital currency would not be so effective in the United States of America.

CBDC Approach Won’t be Effective in the US

With increasing discussions around the central bank digital currencies across different countries, the largest economy in the world has not revealed its definite stance on the trending development. Though the country’s currency, USD, is the biggest reserve currency in the world, a challenge could be posed to its position if it fails to join the revolution.

The chairman of the Federal Reserve, Jerome Powell, however, said the United States, in a bid to join the revolution, cannot rush into the project. Furthermore, he reiterates that the aim and responsibility of the country are to “do it right” rather than fast.

He further stated that the model of Yuan digitalization adopted by the Asian country would not be effective in the United States as the two countries are different. Such a project in the United States would require a different approach.

He said, “the currency used in the Asian country is different from what is used in the United States. It helps the government monitor every single payment it’s used for in real-time.”

He, however, noted that the central bank of the United States is in readiness to execute the creation of CBDC. He said that the institution would need to first be familiarized with the technology the project run with. The result must, however, be simple enough for an average US citizen to understand, including other countries using US Dollars.

China’s Pilot Programs for Launching

While the United States is reluctant with the CBDC project, China has already begun the running of pilot programs to analyze their digital currency. Recent reports even reveal that the country is planning to enable tourists and athletes to use the digital Yuan in the upcoming 2022 Beijing Winter Olympics.

Despite the edge China has with the digital currency, a lot of market authorities identify with Powell’s school of thought that rushing into the creation will not give the results expected.

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