This statement was followed by two big hints about timing in the Reuters article that indicate this isn’t happening anytime soon. While crypto magazines converted the term digital currency into the term cryptocurrency; these are not synonyms. A digital currency could use any digital security model including tokens, perhaps linked to accounts and/or to the faster payments infrastructure. Regardless, we’ll have plenty of time to debate the issue since he also stated “we won’t be the first central bank” and “it is better for us to start getting our hands around it” indicating they were only starting to research the topic:
“It is “inevitable” that central banks including the U.S. Federal Reserve will start issuing digital currency, Philadelphia Federal Reserve bank president Patrick Harker said on Wednesday, while cautioning that the United States should not be the nation to lead such a move.
“Frankly I don’t think we should be the first mover as a nation to do this,” Harker said at a community banking conference here, given the dollar’s role as the world’s reserve currency and the need to test out new technology. But he added: “It is inevitable … I think it is better for us to start getting our hands around it.”
His comment came in response to a question about the Fed’s decision to create its own real-time payments system.
Harker said with the so-called “FedNow” service in the works, ‘I am looking at the next five years after that. What comes next? I do think it is something around digital currency.’ ”
The full Reuters article is worth reading.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group