Quarles Says Fed Digital Dollar Poses Risks With Unclear Benefit

Federal Reserve Vice Chair of Supervision Randal Quarles expressed caution about rushing to issue a central bank digital currency, saying the benefits are “unclear” while the risks could be high.

“Federal Reserve CBDC could pose significant and concrete risks,” Quarles told the Utah Bankers Association Monday, according to his prepared remarks. “An arrangement where the Federal Reserve replaces commercial banks as the dominant provider of money to the general public could constrict the availability of credit, fundamentally alter the economy, and expose the public to a host of unanticipated, and undesirable, consequences.”

Central banks around the world are testing digital ...