Fed Chairman: Public Transaction Ledger Not “Attractive”

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Federal Reserve Chairman Jerome Powell has said that a public ledger of everyday transactions would not be “particularly attractive” to the US. His comments come in the wake of economist Joseph Stiglitz saying last week that cryptocurrencies should not be private, and that there should be a kind of real-time public ledger updated with live transactions that the authorities can watch over.

Libra “Lit a Fire” Under the Fed

Powell was speaking before the House of Representatives Committee on Financial Services on Tuesday when the subject of cryptocurrencies, and in particular the potential impact of Facebook’s Libra and China’s digital yuan on the hegemony of the US dollar.

Powell said that the creation of Libra and its stated ambition to convert the world to the digital currency “really lit a fire” under the bank in its determination to harness blockchain technology and reaffirm the United States’ position as operating the world’s reserve currency. However, he also added that the Fed had not decided on a course of action with regard to a digital dollar, offering various reasons why the time is not yet right:

It is not…there are many questions that need to be answered around a digital currency for the United States, including…cyber issues, privacy issues…many, many operational alternatives present themselves. And so we’re going to be working through all of that and doing that work thoroughly and responsibly.

RemindMe: 2025

Powell did that however that the bank was “working hard” on the best way to combat such a threat without launching their own token, something that US Treasury secretary Steven Mnuchin said in December would not be on the card for at least five years.