US Treasury, Federal Reserve agree there’s no need for America to issue a digital currency in the near future

Some other central banks, including the People’s Bank of China, have discussed creating digital currencies

The European Central Bank is examining whether to develop its own digital currency, while the Hong Kong Monetary Authority is developing a prototype digital token to facilitate trade settlement with the Bank of Thailand

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US Treasury Secretary Steven Mnuchin (right) with US Federal Reserve Chairman Jerome Powell (left) during a Financial Stability Oversight Council (FSOC) meeting at the US Treasury in Washington, DC on Wednesday, December 19, 2018. Photo: Bloomberg

Published: 1:36pm, 6 Dec 2019Updated: 10:57pm, 6 Dec 2019

Treasury Secretary Steven Mnuchin said he and Federal Reserve Chairman Jerome Powell don’t expect the US to create a digital currency.

“Chair Powell and I have discussed this – we both agree that in the near future, in the next five years, we see no need for the Fed to issue a digital currency,” Mnuchin said Thursday at a House Financial Services Committee hearing in Washington.

Some other central banks, including the People’s Bank of China, have discussed creating digital currencies. The European Central Bank is examining whether to develop its own digital currency if the private sector can’t make payments across borders faster and cheaper.

Mnuchin said he and Powell talk weekly, including at a meeting of the Financial Stability Oversight Committee on Wednesday, and had a conversation earlier Thursday on repo markets.

The Fed isn’t developing a digital currency but is studying the costs and benefits of such a move, Powell said in a letter to Representative French Hill, an Arkansas Republican. Hill wrote to Powell in September asking about the national security implications and possible benefits.

“We are carefully monitoring the activities of other central banks to identify potential benefits that may be relevant in the US context,” Powell wrote in a November 19 letter.