Press conference exchange between JEFF COX and Fed Chair Jerome Powell:

user: Thank you, Mr. Chairman, for taking the question. I just wanted to check in with you to see if you have an update at all on the efforts from the Fed to develop a central bank digital currency. I believe that the report was supposed to come this summer, and indications that it’s going to come this month. But the drumbeat seems to be getting louder to see where the Fed’s heading on this, and just wondering if you can provide some update there.

assistant: Sure, I’d be glad to. So we think it’s really important that the central bank maintain a stable currency and payment system for the public’s benefit. That’s one of our jobs. We also live in a time of transformational innovation around digital payments, and we need to make sure that the Fed is able to continue to deliver to the public a stable and trustworthy currency and payment system. So there’s extensive private innovation, a lot of which is taking place outside the regulatory perimeter. And innovation is fantastic. Our economy runs on innovation. But where the public’s money is concerned, we need to make sure that appropriate regulatory protections are in place, and today they really are not in some cases. So with that in mind and with the creation of myriad private currencies and currency-like products, we’re working proactively to evaluate whether to issue a CBDC and, if so, in what form. We have two broad workstreams, one of which is really technology, both at the Board and in the Federal Reserve Bank of Boston’s work with MIT—the other of which is to identify, scope out, deal with, analyze the various public policy issues. As you mentioned, we do intend to publish a discussion paper soon that will be the basis for a period of public engagement— engagement with many different groups, including elected officials, around these issues. We think it’s our obligation to do the work, both on technology and public policy, to form a basis for making an informed decision. The ultimate test we’ll apply when assessing a central bank digital currency and other digital innovations is: Are there clear and tangible benefits that outweigh any costs and risks? We’re also, as you know, investing heavily right now in building a new settlement system for instant payments in the U.S. It’ll be the first such major expansion of our core payment system since the 1970s. We found the case for this quite compelling—for consumers, businesses, and just ensuring that all financial institutions have access to that payment system. So, bottom line, we haven’t made a decision about the CBDC, but we will be issuing a discussion paper soon in order to form the basis of this public interaction that we’ll have. Thank you very much.

user: If I could have a quick—could I get a quick follow on that? Thank you. I was just wondering if—okay—are you concerned at all with falling behind in the global race for digital currencies?

assistant: I think it’s important that we get to a place where we can make an informed decision about this and do so expeditiously. I don’t think we’re behind. I think it’s more important to do this right than to do it fast. We are the world’s reserve currency. And I think we’re in a good place to make that analysis and make that decision—by the way, which will be a governmentwide decision. We would do this, we would have to have a meeting of the minds with the Administration and also probably with Congress. We would really like to have broad support for this. It’s a very important innovation. And I think we would need that to go ahead, and that’s the process we’re engaged in. Thanks very much.