Treasury Secretary Yellen Says She Hasn’t Decided on Digital Dollar Creation

Treasury Secretary Janet Yellen says she doesn’t know whether or not the Federal Reserve should make a digital version of the dollar, Reuters reported Thursday (Dec. 2).

However, such a move would need a broad agreement among Congress, the U.S. central bank and the White House.

In a Reuters Next conference, Yellen said there were both advantages and disadvantages to a digital dollar, adding that there was a Fed report on it expected to come down soon. She said the issue hasn’t usually been discussed in a serious way before now.

“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.”

Meanwhile, Fed Governor Lael Brainard, who is President Joe Biden’s nominee for the vice chair of the central bank, says there’s a need for urgency on the matter. She said over the summer that she couldn’t “wrap [her] head around” China developing one, along with other countries, while the U.S. didn’t have any plans at all.

PYMNTS wrote that, given the roster of crypto officials scheduled to talk to the House Financial Services Committee later this month — including CEOs of Circle, Bitfury, Paxos and more — it’s clear that there will likely be some regulatory action on crypto coming down.

The hearing, scheduled for Dec. 8, is titled Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States.

Read more: Crypto Experts Next Congressional Close-Up Is Coming; Here’s What to Expect

PYMNTS writes that it is intended to look at how the government should support crypto-related innovation and also build a regulatory structure to protect users.

Rep. Maxine Waters, committee chairwoman, says there needs to be regulations on digital assets. This is not a full consensus; for instance, the Chamber of Digital Commerce says stablecoins don’t pose a threat to the financial system.