U.S. Fed’s Vice Chair Barr Says CBDC Decision Still a ‘Long Way’ Off

The U.S. is acold from making immoderate determination connected a cardinal slope integer currency (CBDC), said Federal Reserve Vice Chairman Michael Barr, who described the Fed arsenic inactive being successful the “basic research” phase.

“Investigation and probe are precise antithetic from determination making astir adjacent steps successful presumption of payments strategy development, and we are a agelong mode from that,” Barr said Friday astatine a Federal Reserve Bank of Philadelphia event, adding that the probe is inactive looking astatine the “system architecture” and tokenization models.

And adjacent if it had completed its research, Barr said it wouldn’t marque immoderate determination without “clear enactment from the enforcement subdivision and authorizing authorities from Congress.” Such a measure would person to wide a divided Congress, and the thought of a integer dollar has already drawn crisp criticism from Republican lawmakers.

Barr besides underlined the request for Congress to travel up with answers connected stablecoins – the crypto sector’s tokens tied to dependable assets specified arsenic the dollar.

“I stay profoundly acrophobic astir stablecoin issuance without beardown national oversight,” helium said. “If non-federally regulated stablecoins were to go a wide means of outgo and store of value, they could airs important risks to fiscal stability, monetary policy, and the U.S. payments system. It is important to get the legislative and regulatory model close earlier important risks emerge.”

Meanwhile, the Fed has besides precocious launched its FedNow real-time payments network. Some supporters of FedNow person suggested it could vie with the features offered by stablecoins. Barr said the programme has truthful acold had constricted use.

“While existent volumes connected FedNow are small, I expect that information volition turn implicit time,” helium said.