Patrick Harker, president of the Federal Reserve Bank of Philadelphia, is confident that central bank digital currencies are inevitable.
As Reuters reported on Oct. 2, Harker expressed the idea that central banks — including the Federal Reserve — will inevitably release digital currencies.
Still, Harker believes that the United States should not lead the way, given the dollar’s role as the world’s reserve currency and the need to test out new technologies. He stated at a community banking conference in regard to central bank digital currencies:
“It is inevitable… I think it is better for us to start getting our hands around it.”
Not in the near future
Harker made his remarks in response to a question about the Federal Reserve’s decision to develop its own instant payments system — dubbed FedNow — that was announced at the beginning of August. He noted:
“I am looking at the next five years after that. What comes next? I do think it is something around digital currency.”
As Cointelegraph recently reported, the banks at the Federal Advisory Council told the Federal reserve that Facebook’s crypto project Libra will potentially create a “shadow banking” system, pointing out the risks of potential decline in demand-deposit accounts and bank payment volumes.