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Top Fed Official Says Digital Currency May be the Money Equivalent of Parachute Pants

By The New York Times

June 29, 2021

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Randal K. Quarles, the Federal Reserve's vice chair for supervision, suggested on Monday that the global rush to research and develop central bank digital currencies — often called C.B.D.C.s — reminds him of another four-letter abbreviation. Fear of missing out, or, as it is better known, FOMO.

Citing America's "susceptibility to boosterism and the fear of missing out," Mr. Quarles warned that the nation has a habit of falling victim to a "mass suspension of our critical thinking and to occasionally impetuous, deluded crazes or fads." He invoked the parachute pants of the 1980s as a parallel to the current currency craze, noting that sometimes fads are just silly.

"But the consequences can also be more serious," Mr. Quarles said, speaking from prepared remarks. "Which brings us to my topic today: central bank digital currencies."

Mr. Quarles's extremely skeptical take on the need for — and wisdom of — a possible digital version of the dollar made it clear that while Jerome H. Powell, the Fed's chair, announced in May that the central bank will research the possibility of issuing such a currency, that effort does not enjoy unanimous enthusiasm among his colleagues. The Fed is expected to release a paper on the potential for a digital currency this summer.

From The New York Times
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