BETTER TO GET IT RIGHT THAN TO BE FIRST WITH CBDC, SAYS US FED CHAIR

Last updated: June 19, 2025, 23:40 | Written by: Tyler Winklevoss

The race to launch a Central Bank Digital Currency (CBDC) is underway globally, with many nations exploring the potential benefits of a digital version of their sovereign currency. According to Powell, for the U.S. it's better to get things right than to be first. Powell also says that the Fed is currently undergoing extensive research and development efforts to stay ahead of the issue of CBDC.However, the United States is taking a deliberate and cautious approach.Federal Reserve Chair Jerome Powell has repeatedly emphasized that it's ""better to get it right than to be first"" when it comes to developing a US CBDC. Federal Reserve Chair Jerome Powell has made it clear that the United States will not introduce a Central Bank Digital Currency (CBDC) during his tenure. This stance marks a notable shift from earlier considerations where the Federal Reserve had been exploring the potential of a digital dollar.This cautious stance reflects a commitment to thoroughly evaluating the potential implications, risks, and benefits before committing to such a significant change in the financial landscape.While other countries might be prioritizing speed, the US Federal Reserve is focusing on a thoughtful and well-researched approach, ensuring that any potential digital dollar aligns with the nation's economic goals and values.

This isn't to say that the US isn't actively exploring CBDCs. Better to get it right than to be first with CBDC, says US Fed chair . PANews., . The U.S. already has a safe and active dynamic domesticOn the contrary, the Federal Reserve is heavily engaged in research and development efforts to stay ahead of the curve. Central bank digital currencies ( CBDCs ) present economies with the opportunity to revolutionize payments.However, this research is geared towards understanding the complexities and challenges involved, rather than rushing to be the first to market. Skip to main content Bitcoin Insider. MenuThe goal is to create a CBDC that is secure, efficient, and beneficial to all Americans, while also minimizing potential risks to the financial system and individual privacy. See: Better to get it right than to be first with CBDC, says US Fed chair. In the meantime, the economy can function with digital money distributed directly to citizens. Digital coins, in effect, become a substitute bank credit. Easing the pressure on bad debt and ensuring that bad banks can t paralyze national economies.Getting it right is paramount, even if it means taking a slower, more measured pace.

The US Approach to Central Bank Digital Currencies

The US Federal Reserve's approach to CBDCs is characterized by careful consideration and a commitment to public dialogue.Unlike some countries that are actively piloting or even launching CBDCs, the US is prioritizing extensive research and stakeholder engagement. US Fed Chair Powell believes that the United States should focus on getting right the development of a central bank digital currency (CBDC), rather than attempt to be first. While speaking on a panel hosted by the International Monetary Fund (IMF), Powell reassured that the US is committed to carefully and thoughtfully evaluating theThis approach reflects the complex nature of the US financial system and the potential impact of a digital dollar on various aspects of the economy.

One of the key concerns is ensuring that a CBDC aligns with the existing financial infrastructure and doesn't disrupt the smooth functioning of the payment system.The US already has a robust and dynamic payment system, with various private-sector innovations constantly emerging.A CBDC would need to integrate seamlessly into this existing ecosystem and offer clear advantages over existing payment methods.

Moreover, the Federal Reserve recognizes the importance of addressing potential risks and challenges associated with CBDCs, such as cybersecurity threats, privacy concerns, and the potential for financial instability.These issues require careful consideration and robust solutions before a digital dollar can be safely and effectively implemented.

Why ""Getting It Right"" Matters More Than Being First

Chair Powell's emphasis on ""getting it right"" stems from the understanding that a poorly designed CBDC could have significant negative consequences for the US economy. Better to get it right than to be first with CBDC, says US Fed chairRushing to be the first to launch a digital dollar without addressing fundamental issues could lead to unforeseen problems and undermine confidence in the financial system.

Here's why prioritizing quality over speed is crucial:

Protecting Financial Stability: A poorly designed CBDC could destabilize the financial system by disintermediating banks, disrupting credit flows, and increasing the risk of bank runs.
Ensuring Privacy: A CBDC could raise significant privacy concerns if it allows the government to track citizens' financial transactions.It's essential to strike a balance between privacy and the need to prevent illicit activities.
Maintaining Cybersecurity: A CBDC would be a prime target for cyberattacks, and a successful attack could have devastating consequences for the financial system.Robust security measures are essential to protect against these threats.
Promoting Innovation: A poorly designed CBDC could stifle innovation in the private sector by crowding out private-sector payment solutions. The Federal Reserve and CBDC. Would a CBDC improve the way most people buy coffee? Probably not. But, of course, that s not the primary question. As Fed Chair Jerome Powell recently remarked, It s more important for the United States to get it right than to be first. Getting it right means we not only look at the potential benefits ofIt's important to create a level playing field and encourage innovation.

By taking a careful and deliberate approach, the Federal Reserve aims to avoid these pitfalls and ensure that a US CBDC is designed in a way that benefits all Americans.

The Fed's Research and Development Efforts

The Federal Reserve is actively engaged in extensive research and development efforts to explore the potential of CBDCs.These efforts include:

Technology Research: Investigating different technological approaches to building a CBDC, including distributed ledger technology (DLT) and other innovative technologies.
Economic Analysis: Studying the potential economic impacts of a CBDC, including its effects on monetary policy, financial stability, and payment systems.
Legal and Regulatory Analysis: Examining the legal and regulatory implications of a CBDC and identifying potential challenges and opportunities.
Public Consultation: Engaging with stakeholders from the public and private sectors to gather feedback and address concerns about CBDCs.

Understanding the Technology Behind CBDCs

The underlying technology powering a CBDC is a critical consideration.While some CBDCs are built on distributed ledger technology (DLT), also known as blockchain, others may utilize more traditional centralized databases.The choice of technology impacts security, efficiency, and scalability.

The Federal Reserve is exploring various technological options to determine the best fit for the US financial system. The United States will not be issuing a digital dollar until the Federal Reserve resolves all questions around a potential central bank digital currency, or CBDC, according to the Fed'sThis includes researching the potential benefits and drawbacks of different technologies and evaluating their ability to meet the specific needs of the US economy.

Analyzing the Economic Impact of a Digital Dollar

The potential economic impacts of a CBDC are far-reaching and complex.The Federal Reserve is conducting extensive economic analysis to understand how a digital dollar could affect various aspects of the economy, including:

Monetary Policy: How a CBDC could impact the effectiveness of monetary policy and the Fed's ability to control inflation.
Financial Stability: How a CBDC could affect the stability of the financial system and the risk of bank runs.
Payment Systems: How a CBDC could integrate with existing payment systems and improve the efficiency and speed of payments.
Financial Inclusion: How a CBDC could expand access to financial services for underserved populations.

Navigating the Legal and Regulatory Landscape

The legal and regulatory implications of a CBDC are also a major consideration. The United States will not be issuing a digital dollar until the Federal Reserve resolves all questions around a potential central bank digital currency, or CBDC, according to the Fed's chairmanThe Federal Reserve is working to understand the legal authorities needed to issue a digital dollar and to develop a regulatory framework that addresses potential risks and challenges.

This includes examining issues such as:

Legal Tender Status: Whether a CBDC should be legal tender and what implications that would have.
Data Privacy: How to protect the privacy of CBDC users and comply with data privacy regulations.
Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF): How to prevent the use of a CBDC for illicit activities.
Consumer Protection: How to protect consumers from fraud and other risks associated with CBDCs.

Addressing Concerns About CBDCs

The development of a CBDC raises several legitimate concerns, including privacy, security, and financial stability. As central banks around the world begin the development of digital currencies, Federal Reserve chair Jerome Powell has said it is more important for the US to get it right than to be first .The Federal Reserve is actively working to address these concerns through its research and development efforts and through public consultation.

Some of the key concerns include:

Privacy: The potential for government surveillance of citizens' financial transactions.
Security: The risk of cyberattacks and data breaches.
Financial Stability: The potential for disintermediation of banks and disruption of credit flows.
Accessibility: Ensuring that a CBDC is accessible to all Americans, including those who are unbanked or underbanked.

The Federal Reserve is committed to addressing these concerns and designing a CBDC that is safe, secure, and beneficial to all Americans.

Privacy Considerations for a Digital Dollar

Privacy is a paramount concern in the development of a CBDC. 跳至主要內容. 主頁; 關于; acu支付. 關于acu支付; acu應用; 無現金大使計劃; 下載acu支付Many individuals and organizations are worried about the potential for the government to track their financial transactions and use that information for surveillance purposes.

The Federal Reserve recognizes these concerns and is committed to exploring ways to protect the privacy of CBDC users. Oct 19 (Reuters) - In any development of a cross-border digital currency, it is more important for the United States to get it right than be first, U.S. Federal Reserve Chair Jerome Powell saidThis could include using privacy-enhancing technologies or implementing strict regulations on the use of CBDC transaction data.

Ensuring the Security of a CBDC

Security is another critical consideration.A CBDC would be a valuable target for cyberattacks, and a successful attack could have devastating consequences for the financial system. Reserve Board Chair Jerome Powell has said it is more important for the US to get it right than be first when contemplating any development of a CBDC. xv Powell has also said that the FederalThe Federal Reserve is working to develop robust security measures to protect against these threats.

This includes:

Using advanced encryption technologies.
Implementing strict access controls.
Conducting regular security audits.
Working with cybersecurity experts to identify and mitigate potential vulnerabilities.

Maintaining Financial Stability in a Digital Currency Era

The potential for a CBDC to disrupt the financial system is a significant concern. Menu. บ้าน; เกี่ยวกับ; ACU Pay. เกี่ยวกับ ACU PaySome worry that a digital dollar could disintermediate banks, reduce credit availability, and increase the risk of bank runs.

The Federal Reserve is studying these potential risks and is exploring ways to mitigate them. Federal Reserve Chairman Jerome Powell said more than a year ago that it s better to get it right than to be first. To adopt an efficient CBDC, the Fed must answer questions such as how toThis could include:

Limiting the amount of CBDC that individuals can hold.
Paying interest on CBDC holdings to encourage banks to maintain deposits.
Developing new regulatory frameworks to address the unique challenges posed by CBDCs.

The Global Landscape of CBDCs

While the US is taking a cautious approach, other countries are moving ahead with CBDC development at varying paces. Related: Fed Chair says stablecoins need stricter regulation, speaks on CBDC However, Waller also expressed concern with potential CBDC designs giving the Fed access to a vast amount ofSome countries, such as China, are already piloting digital currencies, while others are still in the research and development phase.

Understanding the global landscape of CBDCs is important for the US as it considers its own approach.This includes learning from the experiences of other countries and adapting best practices to the US context.

China's Digital Yuan: A Different Model

China is one of the leading countries in CBDC development, with its digital yuan, also known as e-CNY, already being piloted in several cities.However, the Chinese model differs significantly from the approach being considered in the US.

The digital yuan is designed to be a centralized system, with the People's Bank of China (PBOC) having full control over the currency. US Federal Reserve Chairman Jerome Powell said that the US should approach the development of a CBDC carefully. He raised doubts that China's digital yuan model can be applied to countries like the US.This contrasts with the more decentralized and privacy-focused approaches being considered in the US.

Chair Powell has raised doubts that China's digital yuan model can be applied to countries like the US, given the differences in political systems, economic structures, and cultural values.

Stablecoins and the Need for Regulation

In addition to CBDCs, stablecoins are another form of digital currency that has gained popularity in recent years.Stablecoins are cryptocurrencies that are designed to maintain a stable value relative to a traditional currency or asset.

However, stablecoins also pose risks, including the potential for runs on stablecoin issuers and the lack of transparency and regulation in the stablecoin market.Federal Reserve Chair Powell has emphasized the need for stricter regulation of stablecoins to protect investors and maintain financial stability.

Related: Fed Chair says stablecoins need stricter regulation, speaks on CBDC.

The Future of Digital Money in the US

The future of digital money in the US is uncertain, but it's clear that digital currencies are here to stay.Whether the US eventually issues a CBDC remains to be seen, but the Federal Reserve is committed to carefully evaluating the potential benefits and risks before making a decision.

In the meantime, the US will likely continue to see innovation in the private sector, with new digital payment solutions and stablecoins emerging.The key will be to strike a balance between fostering innovation and ensuring that these new technologies are safe, secure, and beneficial to all Americans.

Conclusion: A Thoughtful Path Forward for CBDCs

The development of a Central Bank Digital Currency is a complex and multifaceted undertaking.As US Fed Chair Powell has stated, it's ""better to get it right than to be first."" This sentiment underscores the importance of careful consideration, thorough research, and open dialogue in shaping the future of digital money in the United States.The Federal Reserve's commitment to a deliberate and measured approach reflects the potential implications a digital dollar could have on the economy, financial stability, and individual privacy.

Key takeaways:

The US is prioritizing thorough research and public consultation over being the first to launch a CBDC.
Protecting financial stability, ensuring privacy, and maintaining cybersecurity are paramount concerns.
The Federal Reserve is actively engaged in research and development efforts to explore the potential of CBDCs.
The US is learning from the experiences of other countries, but adapting best practices to the US context.
The future of digital money in the US is uncertain, but innovation in the private sector is likely to continue.

The journey towards a potential US CBDC is a marathon, not a sprint.By taking a thoughtful and deliberate approach, the US can ensure that any future digital dollar is designed in a way that benefits all Americans and strengthens the nation's financial system.