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No Compelling Need for Federal Reserve Crypto currency, Says Fed Governor Brainard

The member of the board governor of U.S. Federal Reserve, Lael Brainard has said that she doesn’t see any persuasive need for issuing a digital currency by Fed.

Yesterday speaking in a Conference at Decoding Digital Currency in San Francisco, Lael said that, crypto currency has faced a number of challenges addressed by central digital bank; they “may not withstand closer scrutiny.”

Many American consumers are probably using many other ways of making electronic payments in present time. As people are finding much more easier ways to direct exchange of digital payments through mobile apps and other means which is easier way to deal with crypto.

She noted:

“Finally, there is no compelling demonstrated need for a Fed-issued digital currency.”

In her speech she made it clear that she believes that crypto currency did not pose a risk to financial stability for people.

She noticed that the central bank is dynamically auditing developments in crypto currencies in many areas such as payments policy, supervision and regulation, financial stability, monetary policy etc.  This may lead discussion over security concern with respect of crypto currencies, which includes many breaches and fraud activities, Lael said:

“However, the still relatively small scale of crypto currencies in relation to our broader financial system and relatively limited connections to our banking sector suggest that they do not currently pose a threat to financial stability.”

She continued to say that unfavorable developments and shifts may lead to extreme fluctuations, trading difficulties or even market breakdowns. To prevent from such activities, Brainard worried that Fed Reserve “will continue to monitor crypto currencies as they evolve, with particular vigilance for any signs of growing materiality to the broader financial system.”

As this is not the first time that the Fed governor has spoken over on this issue (crypto currencies).in the month if April of this year Lael has cautioned on individual investors to be aware of the “possible pitfalls of these investments and the potential for losses.” She said at the time that Fed “is monitoring is the extreme volatility evidenced by some cryptocurrencies.”

 

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