CBDCs Will Not Extinguish Cash – Fed
(26 November 2021 – United States) While the Federal Reserve Board continues to closely consider the introduction of a central bank digital currency (CBDC) “digital greenback”, US lawmakers are determined to maintain cash’s place as a viable means of exchange.
Republican Congressman Donald Payne Jr. was so troubled about merchants reducing their acceptance of cash that he introduced the Payment Choice Act to preserve the right of consumers to pay in cash and to ban merchants from rejecting hard currency. He first introduced the bill in 2019 and reintroduced it this past July.
Cash use fell by five percent per annum between 2016 and 2019 before collapsing 24 percent during the COVID pandemic as overall spending slid and contactless payments became de rigour according to McKinsey.
Debate over a central bank digital currency is getting messy. Federal Reserve Chairman Jerome Powell promised a research white paper to launch the discussion of an electronic USD or “eUSD” however that report is heavily delayed and his Fed board colleagues are divided on the issue. Meanwhile, the competitive threat of China’s new cyber Yuan, introduced in Q1 2021, negatively influences decision making.
“There is kind of an attack on American currency right now. It kind of looks like a move toward a cashless society, but this move would really prevent a lot of Americans from buying necessities like food and medicine” he stated in a recent interview.