No need for digital dollar: Says US Federal Reserve and Treasury
[inlinetweet]The US Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin don’t see a need for the digital dollar.[/inlinetweet]
In a Financial Services Committee hearing held on 5th Dec, The US Treasury Secretary Steven Mnuchin said that- “Chair Powell and I have discussed this at length- we both agree that in the near future, in the next five years, we see no need for the Fed to issue digital [dollar] currency”.
Mnuchin’s comment came in response to a lawmaker’s question that referred to Facebook-initiated Libra stablecoin and China’s upcoming digital yuan currency. Notably, the Treasury Secretary has no issues with Libra, provided it is compliant.
Reason for ‘No need’:
He added a digital currency may offer the advantage to countries where consumers’ payment behaviors have changed and cash is less in use. Since the demand for cash in the US remains robust, the Feds at the moment do not see a need to issue digital currency.
Percentage of cash usage in the US:
According to the CNBC report last year, Cash remains the most frequent method of payment in the US, representing 31% of consumer transactions, more than electronic, credit, debit or checks.
| Income level | % using cash | % of US households income level |
| $125,000 and more | 24% | 19% |
| $100,000 to $124,999 | 25% | 9% |
| $75,000 to $99,999 | 26% | 12% |
| $50,000 to $74,999 | 27% | 17% |
| $25,000 to $49,999 | 35% | 22% |
| Less than $25,000 | 43% | 21% |
