United States Fed Chair Chairman Jay Powell is praising the stablecoin project of Facebook (Libra) for making the Fed Reserve look deeply into digital assets.
Powell spoke before the United States House Financial Services Committee, confirming that central banks worldwide are considering the likelihood of developing digital versions of fiat currencies. He continued as follows:
Having a single government currency at the heart of the financial system is something that has served us well. It’s a very, very basic thing. It really hasn’t been in question, and I think before we move away from that, we should really understand what we’re doing.”
In 2019, both Facebook and its stablecoin project were criticized by Powell and other policymakers, as they noted their concerns regarding Facebook’s track record on data privacy as well as the financial influence of a stablecoin with the ability to reach a built-in user base of billions.
According to Powell, Libra has been able to light a fire and was somewhat a wake-up call that this is coming fast and may emerge in a manner that is quite universal and systematically essential – somewhat speedily, if you use one of these big tech networks like Libra did.
However, he restated that the Fed Reserve is only looking at the likelihood of developing a digital asset and nothing is in motion. He noted that although it is essential to make speedy progress, several questions are yet to be answered concerning digital currency for the U.S., as well as cyber and privacy issues.
He said several operational alternatives have emerged, so they need to work through everything. Regarding Bitcoin and the cryptocurrency markets, he said the United States should keep developing a strong regulatory system for the nascent assets.
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