Jerome Powell

Photographer: Al Drago/The New York Times/Bloomberg

Potential central bank digital currencies would need to be integrated into existing payment systems alongside cash and other forms of money, Federal Reserve Chair Jerome Powell said.

A recent report from the Bank for International Settlements and a group of seven central banks, which includes the Fed, assessed the feasibility of CBDCs in helping central banks deliver their public policy objectives, Powell said Thursday in prerecorded video remarks delivered to a payments conference in Basel, Switzerland.

Relevant to todays topic, one of the three key principles highlighted in the report is that a CBDC needs to coexist with cash and other types of money in a flexible and innovative payment system, Powell said.

The Fed chair was delivering closing remarks to a conference hosted by the Committee on Payments and Market Infrastructures, a group of central bankers from around the world convened by the BIS.

The Covid crisis has brought into even sharper focus the need to address the limitations of our current arrangements for cross-border payments, Powell said. And as this conference amply demonstrates, despite the challenges of this last year, we still have been able to make important progress.

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