Powell (US Federal Reserve chair) - "does not want to rush digital dollar"

[paxmao]

Powel recenlty made a series of statements around digital currency. Among the declarations:

Fed Chair Jerome Powell says central bank-backed digital currencies must coexist alongside cash and other forms of money

Powell recently said that a potential digital dollar is a "high priority" project for the US, although that comes with notable technical and policy-related issues

Effectively, the issue for government backed digital currencies, which are not anything like a decentralised crypto, is regulations. To elaborate, the world has seen massive changes in the way money moves around. Banks are in general interested in putting some friction and cost to money movements, and a digital currency would probably create an environment to that middleman to disappear or be much less relevant.

Governments are mostly concern about what does means to the control they currently have on the flows of information about money, money laundering and taxation. So we should read any comment in that light and translate: "We do not have the regulations in place to allow for a digital dollar". On a side comment, China may use this opportunity to get ahead and has shown some movement towards it.

[fiulpro]

What they don't want to do is to introduce the digital dollar at a time where the whole country is on the verge of collapsing and at the same time the USD is not strong enough to handle the situation right now therefore they are going to look for the opportunity when the USD will be strong, the country would not be in shacks and at the same time people will have money to invest. Right now they are borrowing money from other countries and giving that money more like a bribe to other people to make sure they vote again after years. Plus I wonder if they would decide to Ban "Bitcoins and other cryptocurrencies since at the end of the day they would need all the attention to themselves. I believe the Government will try and offer serval schemes for the people who engage in such things.
They indent to control the whole market and therefore soon they will try and first control the other cryptocurrencies being used and then go forward with their digital dollar which I am sure won't be anonymous and will be used to spy on people.

[palle11]

"We do not have the regulations in place to allow for a digital dollar".

This is a strong language from the quote and this is simply obvious to say that the government is scared to relinquish the role of middle man as the cryptocurrency and digital space is most certain to shatter off. The government is protecting itself from not being relevant in the global regulation and control of the effect of governance. Printing of fiat creates inflation and government knows that and that is why as soon as inflation happens, they introduce measures to push it down either through taxation or lending, that is control.

The banks are big middle men and they are owned by government and people in government , this is why they seem not ready for a decentralized system of digital economy in cryptocurrency.

[Fesatmas]

Jerome Powell often said that the United States would not be in a hurry to present a cryptocurrency competitor in the form of the Central Bank Digital Currency (CBDC) in his country. However, his position will still not be shifted at all. in some cases faced by the federal side, it created a fairly favorable policy. so we agree that Bitcoin is just a substitute for gold, not a substitute for traditional money. He also finally said that the existence of Covid-19 has provided valuable lessons, namely where the position of digital money is very important in the development of a better payment system. money can be easier and faster to get to the destination ..

[Hydrogen]

Direct ventures into existing competitive markets (like digital currencies) isn't something governments or banks usually do.

There's a big question of what advantages, if any, a central bank digital transaction service could offer over mastercard, visa, ameircan express etc.

What if the federal reserve unveiled a digital currency and no one liked it or used it? What if their rollout currency offered no advantages over existing digital currencies while containing significant disadvantages?

Bank wire transfers often charge higher fees per transaction in comparison to bitcoin. It is possible central bank issued digital currencies couldn't compete with existing cryptocurrencies without an expensive upgrade and overhaul of their existing infrastructure.

[Mauser]

Effectively, the issue for government backed digital currencies, which are not anything like a decentralised crypto, is regulations. To elaborate, the world has seen massive changes in the way money moves around. Banks are in general interested in putting some friction and cost to money movements, and a digital currency would probably create an environment to that middleman to disappear or be much less relevant.

Governments are mostly concern about what does means to the control they currently have on the flows of information about money, money laundering and taxation. So we should read any comment in that light and translate: "We do not have the regulations in place to allow for a digital dollar". On a side comment, China may use this opportunity to get ahead and has shown some movement towards it.

This comes quite as an suprise to me. I was expecting that Biden will try to push the digital Dollar through very fast. Dollar aswell as the Euro were expected to come into play soon as new form of currency to the tradional crypto currencies. Putting the layout on hold seems like a drastic move, but for the crypto community it should be a good decision. Less competition for our precious coins.

[hatshepsut93]

They all may want to have their own government-owned currency, but how are they going to solve scalability? Banks can function, because they rely on Visa and Mastercard, and those two companies own a lot of infrastructure to make it possible. Are governments going to build such infrastracture from zero? Cryptocurrency wasn't some major breakthrough in financial technology in any aspect but giving control to the users, so governments can't just take cryptocurrency technology and build their own currency with it and expect it to get mass adopted.

[Lorence.xD]

They all may want to have their own government-owned currency, but how are they going to solve scalability? Banks can function, because they rely on Visa and Mastercard, and those two companies own a lot of infrastructure to make it possible. Are governments going to build such infrastracture from zero? Cryptocurrency wasn't some major breakthrough in financial technology in any aspect but giving control to the users, so governments can't just take cryptocurrency technology and build their own currency with it and expect it to get mass adopted.

I think when it comes to the government having their own currency, I don't think that scalability will not be an issue as long as the congress agrees that it is worthwhile endeavor for them to expand. Or maybe they can just use the private companies infrastructures to make that a possibility since these companies and the government can do a quid pro quo. We know that a government that is determined will be able to do what it wants until it gets it.

[Poker Player]

On a side note, apart from the regulatory problem, I think a big problem with this is that it eliminates the need for banks. Centralized cryptocurrencies from central banks make them completely useless and it seems to me that they're going to have to think long and hard about how they do that because they can't just take over the banking system overnight.

[justdimin]

I think when it comes to the government having their own currency, I don't that scalability will not be an issue as long as the congress agrees that it is worthwhile endeavor for them to expand. Or maybe they can just use the private companies infrastructures to make that a possibility since these companies and the government can do a quid pro quo. We know that a government that is determined will be able to do what it wants until it gets it.

I think the problem is that the more money you print, the more problem you create as well. Who would be willing to spend that much money? Most of that will be basically stored and that is why basically there is nothing that could be done about inflation. It would be great if everyone spent all their money all the time and money was in circulation, that's how it would be done.

Do you expect that the last trillions of dollars printed would be spent constantly? Changing hands all the time? I do not think that it would happen.

This is why I think it is quite obvious that we will not see that money, it will be in some banks vaults or just digital and nothing more. This is why I think it is quite obvious that we should not be happy about what we have with the fiat world, that is why people are moving towards crypto, because printing fiat and expanding can't be sustained forever.

[dothebeats]

At the current state of things, I don't know if it'll be wise for the Fed to rush R&D for digital dollar. The widespread use of payment processors such as Visa, PayPal, and the likes already eliminates the need for the introduction of USD on the digital realm. Plus, it'll be a long and hard transition for most of the population that are still reliant on physical cash for their day-to-day transactions. For the part of the Feds, it'll need a long and thorough research on the cons rather than the pros of introducing digital dollar to the world.

[LUCKMCFLY]

Lately Powell has made many statements, now with the digital dollar, he recently published that Bitcoin can substitute for gold, despite its high volatility, and at the same time he claims that he does not consider it as a safe haven, here you can also see: Bitcoin is 'more a substitute for gold than the dollar' — Fed Chair Powell. It is well known that all governments want to have or pretend to want to control the uncontrollable, just like banks, now through Blockchain technology they want to enter with the circulation of digital money, but if the dollar is currently with inflationary deficiencies, I would like know how they could manage it through Blockchain technology ... How can they do for supplies? Will it say that the dollars they print or place will be unlimited?

[magneto]

Powel recenlty made a series of statements around digital currency. Among the declarations:

Fed Chair Jerome Powell says central bank-backed digital currencies must coexist alongside cash and other forms of money

Powell recently said that a potential digital dollar is a "high priority" project for the US, although that comes with notable technical and policy-related issues

Effectively, the issue for government backed digital currencies, which are not anything like a decentralised crypto, is regulations. To elaborate, the world has seen massive changes in the way money moves around. Banks are in general interested in putting some friction and cost to money movements, and a digital currency would probably create an environment to that middleman to disappear or be much less relevant.

Governments are mostly concern about what does means to the control they currently have on the flows of information about money, money laundering and taxation. So we should read any comment in that light and translate: "We do not have the regulations in place to allow for a digital dollar". On a side comment, China may use this opportunity to get ahead and has shown some movement towards it.

I am not too sure what he means by CBDC's coexisting with cash.

The whole point of introducing a CBDC in the first place is to eliminate the need to carry cash. Why in the world would you have a clumsy system whereby banks, cash, and CBDCs all operate alongside each other?

This sort of system doesn't quite make sense to me. It is much more likely that the end goal of the CBDC project is to eliminate cash and therefore all possibilities of anonymous transactions. People should not confuse decentralised cryptos with these centralised blockchains.

[acquafredda]

No need to rush it as people can already buy Teslas with bitcoin. And as the time goes by and more companies and business will start doing the same, the need for a central bank digital currency will be a thing of the past.
The revolution will be bottom-up

[Lorence.xD]

~

I think the problem is that the more money you print, the more problem you create as well. Who would be willing to spend that much money? Most of that will be basically stored and that is why basically there is nothing that could be done about inflation. It would be great if everyone spent all their money all the time and money was in circulation, that's how it would be done.

Do you expect that the last trillions of dollars printed would be spent constantly? Changing hands all the time? I do not think that it would happen.

This is why I think it is quite obvious that we will not see that money, it will be in some banks vaults or just digital and nothing more. This is why I think it is quite obvious that we should not be happy about what we have with the fiat world, that is why people are moving towards crypto, because printing fiat and expanding can't be sustained forever.

What are you talking about? The title completely says digital dollar, and that is what I was referring too, if there is a digital dollar then there is less money printed and I think that it is a viable solution to what you are saying. Don't you understand scaling, a lot of USD is going to change hands everyday and I mean billions because US is a big economy not to mention that there is also the international part of that money circulation, they print money because they have to replace around 80% of old dollars in the circulation that goes back to them.

[Wexnident]

This is a strong language from the quote and this is simply obvious to say that the government is scared to relinquish the role of middle man as the cryptocurrency and digital space is most certain to shatter off. The government is protecting itself from not being relevant in the global regulation and control of the effect of governance. Printing of fiat creates inflation and government knows that and that is why as soon as inflation happens, they introduce measures to push it down either through taxation or lending, that is control.

I guess having policies involved when there's a middleman is also the same when the said middleman disappears. They are probably looking (hopefully) into how transactions without any middleman would happen and how it would affect the citizens (but mostly them). Not to mention that there'd probably be a huge overhaul if they ever decided to force the adoption of their CBDC towards the population. I for one think there really isn't much of a difficulty to see the advantages it brings towards us, but there'd probably be a load of disadvantages for them, mostly in the bank side of things.

[acquafredda]

I believe the more of the budget towards the adoption of any CBDC will be on marketing as it will be really hard for the institutions to let the people accept this game changing tool. If I think about privacy preserving countries like Germany, Switzerland etc. it will be really hard to implement any CBDC if this is not privacy aware.
They cannot force the adoption, but in one way or the other they will implement it since they want to regain control on people's money.

[mindrust]

I don't really understand what they really mean by "digital dollar". The dollar is already digital. Almost all dollar transactions are happening via credit cards. Only a handful of people still use cash. It only makes sense if they want to ban physical cash completely but then, good luck with explaining this to the older people that don't use phones.

It is not happening.

[paxmao]

They all may want to have their own government-owned currency, but how are they going to solve scalability? Banks can function, because they rely on Visa and Mastercard, and those two companies own a lot of infrastructure to make it possible....

Do you really believe that infrastructure is really a problem for a government? There are currently many chains that can run on limited nodes and the infrastructure for a PoS coin is really minimal. Just imagine 300 nodes run by trusted financial institutions, which do not only stake but also have contracts in place to make all legal.

The infrastructure, choice of chain or type of system (does not have to be a chain) is not much of an issue.

[el kaka22]

Where your post reads that the middleman will disappear when the government creates their digital currencies, I don’t think that’s true. If eventually the government decides that they are going to be creating their digital currencies, the middlemen (banks and financial institutions) will still be there because they have become part of it.

You’re forgetting that whatever that has to do with digital currencies created by the government will be handled by the arm of the government that handles everything that has to do with finance, which is the Central Bank, they will even be the ones to issue these currencies we are talking about here. And the other banks will still be there, they will all be part of it, they are like the eyes of the government in all these areas.