The Federal Reserve’s report on cryptos and CBDCs (central bank digital currencies), which is highly anticipated, will be released within weeks according to Fed Chairman Jerome Powell. Initially, it was expected in September 2021.
Powell, whom President Biden nominated for a second term as Fed chairman, was asked about the timing of the report by Sen. Mike Crapo (R-Idaho) during his confirmation hearing in front of the Senate Banking Committee on Tuesday.
Powell said on account of the delay:
We didn’t get it to quite where we needed to get it. But it’s effectively there now, it’s within weeks [that] we will be publishing it.
His comment echoes similar testimony given at a Senate hearing in November, when he assured the report would be released in the “coming weeks.” He had said it was “coming soon” two months earlier.
Focus on bank-issued stablecoins expected
The report is expected to focus on CBDCs, a topic extensively researched by the Fed and a popular subject of discussion at congressional hearings, at which Powell is often called as a witness. At the most recent hearing, Sen. Pat Toomey (R-Pa.) asked Powell about these currencies again:
Some have advocated, as you know, that a central bank digital dollar be used and developed in such a fashion that individual Americans have retail accounts with the Fed and the Fed becomes the retail banker for America. It seems to me that there is absolutely nothing in the history, the experience, the expertise, the capabilities of the Fed, that lend the Fed to being a retail bank. Is that Is that a fair observation?
Powell answered in the affirmative. He also said “yes” to the question of whether a CBDC could coexist with privately issued, well-regulated stablecoins if Congress granted the central bank the authority to pursue it.
Sen. Cynthia Lummis (R-Wyo.), a crypto advocate who owns large amounts of Bitcoin, said to Powell:
As you know, Chairman Powell, I’m terribly concerned about the manner in which Wyoming’s Special Purpose Depository Institutions are being treated by the Federal Reserve, as we’ve discussed.
He responded:
There are good arguments for viewing SPDs as depository institutions for this purpose. I think you do understand that we, you know, we started granting these. There’ll be a couple hundred of them pretty quickly, and we have to think about the broader safety and soundness implications. And you know, it’s just hugely presidential, that’s really why we take our time with it.
