US Fed outlines 4 qualities digital greenback should have

By Tuba Sahin

ANKARA (AA) - The US Federal Reserve outlined four key features a central bank digital currency (CBDC) should have, chair Jerome Powell said Wednesday.

"We haven't made any decisions over whether we will eventually issue a dollar CBDC. But what the underlying technological design of one would be, we did outline four key principles that are currently guiding our thinking," Powell said at a virtual panel at the Bank for International Settlements (BIS) Innovation Summit.

A CBDC will need to ensure user privacy, be "identity verifiable," "intermediated" and serve as a widely accessible means of payment, said Powell.

Citing the US' existing regulatory frameworks were not built considering the digital world, Powell said: "Stablecoins, CBDC and digital finance more generally will require changes to existing laws and regulation or even entirely new rules and frameworks."

Powell said the recently issued discussion paper on the future of money in payments helps the bank examine potential use cases benefits and costs at risks.