Cybercrime is the main risk to the economy, says Fed boss

Spread the love

The president of the US Central Bank (Fed) is worried about the risk of a large-scale cyberattack. The risks of a 2008-like crisis with a need for a government bailout of banks “are very, very low,” Jerome Powell said on the show. 60 minutes on the American channel CBS news.

“The world changes. The world evolves. And the risks too. And I would say the risk we watch the most is cyber risk, ”he said, adding that this is a concern shared by many governments, large private companies especially financial ones. It is also against this risk that all these players invest the most.

Read also: The UN fights cybercrime with the help of Switzerland

Jerome Powell pointed out that the Federal Reserve (Fed) is looking at different types of scenarios. “There are scenarios in which (…) the payments system cannot function. Payments cannot be made. There are scenarios where a large financial institution would lose the ability to track the payments they make and things like that. ”

The Fed is also considering the possibility that part or even a large part of the financial system could shut down. “We therefore spend a lot of time, energy and money to guard against that,” said the boss of the powerful institution, recalling that cyber attacks target large institutions “every day”.

A digital US dollar envisioned

Jerome Powell was also asked about the possibility of creating a digital dollar when China last month became the first major world economic power to unveil a cryptocurrency.

He pointed out that the Fed is currently evaluating this possibility. “We believe it is our duty to understand. How would that work? What would be the characteristics? ”He explained.

To read also: From blockchain to virtual currencies

He also indicated that the Fed is developing software and even designing the appearance of a digital US dollar, but the final decision to release it will not be made until its impact is fully understood.

The dollar is “the reserve currency of the world. The dollar is so important … We don’t have to be the first to do it. We want to do it right. And that’s what we’re going to do, ”he insisted.

The need to assess the issues of issuing a cryptocurrency

Last October, Jerome Powell had already indicated that the United States was considering issuing their cryptocurrency but he then warned that the full assessment of the benefits and risks would take time.

The creation of a digital dollar could benefit the US economy, Treasury Secretary Janet Yellen said more recently in an interview with New York times published on February 22. She then mentioned the need for central banks to properly assess the associated issues, in particular consumer protection.