"The Federal Reserve Board will issue a discussion paper this summer outlining our current thinking on digital payments, with a particular focus on the benefits and risks associated with CBDC in the U.S. context," Powell said in a video message.
"The paper represents the beginning of what will be a thoughtful and deliberative process," he said, adding the Fed will ask for public comment on issues related to payments, financial inclusion, data privacy, and information security.
Powell noted that the Fed hasn't come to a conclusion on whether and how to move forward with a U.S. CBDC.
"Our key focus is on whether and how a CBDC could improve on an already safe, effective, dynamic, and efficient U.S. domestic payments system. We think it is important that any potential CBDC could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks," he said.
Powell also said that the design of a CBDC would raise important monetary policy, financial stability, consumer protection, legal, and privacy considerations and will "require careful thought and analysis."
"Irrespective of the conclusion we ultimately reach, we expect to play a leading role in developing international standards for CBDCs, engaging actively with central banks in other jurisdictions as well as regulators and supervisors here in the United States throughout that process," he said.
Many central banks are experimenting or at least conceptually thinking about rolling out digital versions of their currencies, and China is among the first large economies that has been pushing forward with its experiment, Helge Berger, China mission chief and assistant director in the International Monetary Fund's Asia and Pacific Department, told Xinhua last month.
"We have seen some of the advantages of digital currencies during the recession last year, when the fiscal authorities in China used electronic means to target fiscal support to particular consumers in a helpful way," Berger said.
The IMF official believed that digital currencies have a potential to make financial services "much more inclusive," while there are also risks worth watching.
"We're keeping a close eye on it and together with the Chinese authorities, we're learning from the Chinese experience," Berger said.
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