US Treasury Secretary Speaks Out on Central Bank Digital Currencies

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Key Takeaways:

  • US Treasury Secretary peaks out on Central Bank digital currencies.
  • In a new interview with Reuters, Yellen says she’s waiting for the Federal Reserve to release an assessment on CBDCs.
Us Treasury Secretary Speaks Out On Central Bank Digital Currencies
US Treasury Secretary Speaks Out on Central Bank Digital Currencies

Janet Yellen, the US Treasury Secretary, stated that she has yet to decide whether the US should deploy a central bank digital currency (CBDC).

Yellen indicated earlier this year that the Biden administration supports research into the possibility of a digital dollar NSE -0.42%, a change from her predecessor, Steven Mnuchin’s lack of enthusiasm for the subject.

At a virtual conference hosted by the New York Times on Monday, Yellen said, 

“It makes sense for central banks to be looking at issuing sovereign digital currencies.”

She believes that a digital version of the dollar could help low-income households in the United States overcome barriers to financial inclusion.

In a new interview with Reuters, Yellen stated that she is awaiting the Federal Reserve’s central bank digital currencies review.

She points out that Fed Chairman Jerome Powell has stated that the report will be released “very quickly.”

Regarding her personal views on the topic, Treasury Secretary Steven Mnuchin believes she understands the benefits and drawbacks of enacting a CBDC.

“There are some advantages. However, there is an additional significant price. It might work to disintermediate the banking system, and we have to work by the professionals and cons. I don’t have a view, but I think it’s important to understand the Fed’s point of view – they agree that this is a decision where we need consensus.”

Yellen emphasizes that whatever decision is made on central bank digital currency would require “consensus” from several US government agencies.

“They’ll want to know what the administration’s position is on this, and although we haven’t raised it in a serious way within the White House, they’ll want to know. And Congress will weigh in on the issue as well.”

When it comes to building a central bank digital money, Powell stated this summer that he focuses on execution rather than speed.

According to Reuters, Yellen has no intentions to leave her position as Secretary of the Treasury anytime soon.

“I’ve no plans to go away this job. I’m having fun with it, and we’ve bought an enormous quantity of necessary work to do, so I’ve no plans to go away Treasury any time quickly.”

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Aadrika Sharma

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