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4 Requirements of a U.S. CBDC

Fed chair Powell says digital dollar would have to simultaneously ensure privacy and offer identification for participants in a transaction.

By Craig Torres | March 23, 2022 at 07:16 PM
Stock photo: Jerome Powell

Federal Reserve Chair Jerome Powell outlined four qualities a hypothetical digital currency in the U.S. must have while adding that no final decision has been made on whether to proceed with creating one.

Powell said a central bank digital currency (CBDC) would need to ensure user privacy; it would need to be “identity verifiable,” similar to the way U.S. bank accounts are identifiable to prevent money laundering; it would need to be “intermediated,” or widely embraced by the current banking system; and it would need to be able to serve as a widely accepted means of payment.

Powell made the comments Wednesday during a virtual panel at the Bank for International Settlements (BIS) Innovation Summit.

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