1 min read.Updated: 15 Jul 2021, 08:33 PM ISTReuters
Federal Reserve chair Jerome Powell said he had not made up his own mind on the merits or demerits of a central bank digital currency, but he would want authorization from Congress before taking any action to create one
Federal Reserve chair Jerome Powell on Thursday said he had not made up his own mind on the merits or demerits of a central bank digital currency, but he would want authorization from Congress before taking any action to create one.
"I am legitimately undecided on whether the benefits outweigh the costs or vice versa," Powell said during a hearing before the Senate Banking Committee. If the Fed were to issue its own digital currency, he said, "we would want very broad support in society and in Congress and ideally that would take the form of authorizing legislation as opposed to a very careful reading of ambiguous law."
Powell also said the US central bank is looking into using climate stress scenarios to make banks more aware of and resilient to ever-more-frequent severe weather events, and could go in that direction.
Climate stress scenarios, as distinct from regular stress tests, are "proving to be... a very profitable exercise, both for the financial institutions and for regulators" in Europe where central banks have begun using them, Powell told the Senate Banking Committee.
"We haven't decided to do that yet. We are in the process of looking very carefully at that. My guess is that's a direction well go in, but we are not ready to do that yet."