- The Federal Reserve aims to weigh the potential benefits and risks of issuing a U.S. digital currency as early as this week, the Wall Street Journal reports.
- The U.S. central bank would issue and back the Fed version, unlike private cryptocurrencies like bitcoin.
- A Fed digital dollar could quickly and cheaply move money around the financial system, reaching people without bank accounts and helping government distribute financial aid, advocates said.
- Fed Chairman Jerome Powell would consider issuing a so-called central bank digital currency (CBDC) provided "clear and tangible benefits that outweigh any costs and risks." He also pointed at privacy issues as a Fed CBDC system would enable the central bank to view every user's currency.
- The central bank's point man on financial regulation, Randal Quarles, admitted that the U.S. dollar is already "highly digitized" and expressed doubts about the Fed CBDC's role to draw people without bank accounts into the financial system.
- A Philadelphia Fed report warned that a U.S. central bank CBDC could destabilize the financial system in a crisis if people pull their money out of banks, mutual funds, stocks, and other investments and plow it into the Fed's currency.
- The Fed plans to launch a paper analyzing the issue and seeking public comment without a firm policy recommendation.
- The Boston Fed would likely release a more technical paper on the mode of work of digital dollar.
- Price Action: BTBT shares traded lower by 2.60% at $7.86 in the market session on the last check Monday.
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