The Federal Reserve does not plan to issue its own version of the smart card, Fed Governor Edward W. Kelley Jr. said Monday.

"Given the range of different products that have been announced, there does not seem to be a lack of private-sector activity that would justify such action by the central bank at this time," Mr. Kelley said at a conference sponsored by the Software Publishers Association.

In fact, Mr. Kelley said direct competition between the Fed and the private sector could stifle the "current climate of innovation."

Mr. Kelley also urged bankers to ask the Federal Deposit Insurance Corp. to rule if smart card balances are covered by deposit insurance. He said depositors deserve an answer before they put money on the cards.

Also at the conference, Comptroller of the Currency Eugene Ludwig said the government needs to eliminate many of the restrictions that prevent banks from operating in different states. Technology has made the restrictions irrelevant, he said.

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