Janet Yellen says Digital Dollar Only Several Years Away

Treasury Secretary Janet Yellen said the design and development of a digital dollar would take years if the United States decides to create it, raising a number of issues the Biden administration is weighing as it considers faster payment methods in the United States.

As part of President Biden's crypto executive order, the administration is exploring the possibility of issuing a central bank digital currency following the efforts of the Federal Reserve.

Ms Yellen, a former Fed chairwoman said, “I can’t tell you yet what conclusions we will reach, but we must be clear that issuing a CBDC would likely present a major design and engineering challenge that would require years of development, not months.” 

In a speech at American University in Washington on Thursday,  Yellen said the administration's efforts will take into account the effects of CBDCs on monetary policy, national security and international trade and the benefits to consumers.

Yellen said the US should make its payment system cheaper, faster and easier to access noting that the current system could put pressure on high-interest lenders to cover costs while low-income Americans wait for paychecks to clear.

She also said that policymakers should approach the industry with a tech-neutral approach, crafting new policies based on how to best protect against risk, rather than necessarily targeting new forms of technology.