Speaking before the Senate Banking Committee on February 23, Federal Reserve Chairman Jerome Powell said that developing a digital dollar for the United States is a "high priority."
Gear shift for the digital dollar
In the past, Powell has said that the Federal Reserve is considering a digital dollar or a central bank digital currency (CBDC).
However, the Federal Reserve is in no rush to implement it. Powell has previously mentioned that it is more important to “get it right than to be first” when it comes to digital currencies. He reiterated in today's hearing, since the US dollar is the world's reserve currency, the US does not have to immediately introduce a digital variant.
However, Powell's comments today suggest that the United States will eventually announce a digital currency. The United States has noted China's rigorous efforts to promote its digital yen and dethrone the US dollar, perhaps increasing the likelihood that the United States will introduce its own digital dollar sooner rather than later.
Powell doesn't expect the digital currency to affect monetary policies.
Powell also looks at economic policy
Powell also stated that the Federal Reserve will continue to maintain accommodative economic policies, that is, designed to stimulate activity through low interest rates.
The employment objective does not reach 10 million dollars in weekly payroll and inflation is "soft" below 2%. Therefore, the Federal Reserve will continue to lend at zero interest rates and will also buy government bonds to stimulate the economy.
The US Dollar Index (DXY) against other fiat currencies remained below support around $ 90.50 while inflationary fears held steady. Gold, which has seen a bullish reversal in the past two days on hopes for stimulus, also continued to trade above the support at $ 1,800.
Bitcoin and stocks continued to trade around the weekly low. The NASDAQ index was trading near lows of $ 138.80, down 1.25% on a daily scale, while BTC was trading around $ 49,000.