By Alessandra Galloni
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Thursday she has not formed a view on whether the Federal Reserve should create a digital version of the dollar, but such a move would require broad consensus among Congress, the U.S. central bank and the White House.
Yellen said during a Reuters Next conference interview that the advantages and disadvantages of a central bank digital currency needed further study, including its effects on the banking system.
“I see both pros and cons to doing it. And my own mind is not made up about this,” Yellen said.
Fed Governor Lael Brainard, who is President Joe Biden’s nominee for the U.S. central bank’s vice chair position, has called for “urgency” in developing a digital dollar, saying in July that she “can’t wrap my head around” not having one when China and other countries are developing their own central bank digital currencies.
Yellen said a Fed report on the issue was expected soon, and the central bank understands that consensus is necessary to proceed.
The Treasury chief, who led the Fed from 2014 to 2018, said the issue has not been discussed in a “serious way” at the White House and that Congress will also need to weigh in.
“This is a decision that’s important and needs to command consensus. There are some benefits, but there are also meaningful costs,” Yellen said. “It can work to disintermediate the banking system. And, you know, we need to work through the pros and cons. I don’t have a view yet.”
(Reporting by Alessandra Galloni, David Lawder, Andrea Shalal and Daniel Burns; Editing by Paul Simao)
