US Federal Reserve Head Says Crypto Can “Coexist” With Cash

The US Federal Reserve head Jerome Powell says digital currencies can coexist with cash and they can be allowed to exist as long as they are regulated so let’s read more in our latest cryptocurrency news today.

Jerome Powell, the US Federal Reserve head said that state-backed digital assets and CBDCs can function hand in hand alongside fiat money in the next few years according to the Bloomberg reports. Powell made comments in a prerecorded video during a payments conference in Basel, Switzerland as there’s a bigger institutional push for crypto-assets and BTC in recent times.

CBDCs are theorized as fiat-backed stable coins because they are directly controlled and issued by a state so all transactions will be seen on the blockchain and can be easily traceable compared to cash. However, it may not be as accessible to use BTC or other cryptocurrencies for many. For Powell, these play a huge role in the financial markets as he said:

 “A recent report from the Bank for International Settlements and a group of seven central banks, which includes the Fed, assessed the feasibility of CBDCs in helping central banks deliver their public policy objectives.”

He also continued that a CBDC will have to coexist with cash and other types of money in an innovative payments system. Powell noted that the current COVID crisis drove the need for a reliable cross-border currency system by outlining the limitations of the current payment system:

 “And as this conference amply demonstrates, despite the challenges of this last year, we still have been able to make important progress.”

The conference was attended by many members of the Bank of International Settlements as well as plenty of other financial regulators. Digital currencies are seeing some more popularity among bankers and global financiers especially in 2020 because of the crisis. Some of the major concerns about cash and currency monetary policies are the lack of local and international banking during times when they were needed the most.

Christine Lagarde who is the chief of the European Central Bank said that last year, the pandemic “hastened” the shift to a digital currency system and commented that there was a global surge in digital payment methods which seems safer than cash.  The thoughts were echoed by other institutions like the Bank of England and Bank of Japan who also consider launching their own CBDCs.