Fed Chair Jerome Powell Says No To US CBDC
Federal Reserve Chair Jerome Powell has made it clear that the United States will not introduce a Central Bank Digital Currency (CBDC) during his tenure.
This stance marks a notable shift from earlier considerations where the Federal Reserve had been exploring the potential of a digital dollar.
No CBDC For The United States, Powell Confirms
This declaration came during a recent Senate Banking Committee hearing on Tuesday when Powell responded to a direct question from Senator Bernie Moreno (R-OH).
Can I have your commitment that as long as youre the chair of the Federal Reserve system, that we will never have a central bank digital currency? Moreno asked. Yes, Powell responded.
The Feds previous research on CBDCs aimed at understanding how such a currency might improve the current payment systems efficiency and safety.
Critics of CBDCs, including the Cato Institutes Nicholas Anthony, have praised Powells commitment, citing potential risks to financial freedom, privacy, and market stability. Unlike decentralized cryptocurrencies like Bitcoin, a CBDC would be government-issued and regulated, potentially leading to concerns over surveillance due to its trackable nature.
This announcement comes at a time when several countries are actively experimenting with their own digital currencies. Notably, Chinas digital yuan pilot started in 2020, with other nations like Russia, Turkey, and Japan also exploring similar initiatives.
Republicans Stopping CBDCs
Powells firm stance highlights a divergence in U.S. policy compared to these global trends, especially under the current U.S. administration led by President Trump. Senator Moreno specifically praised Powells stance since it meant the U.S. wouldnt wind up looking like China in any way.
The debate around CBDCs in the U.S. has seen significant political pushback, especially from Republican lawmakers who have called for bans on government-issued digital currencies.
Last year, the House of Representatives passed a bill from Congressman Tom Emmer to ban the Federal Reserve from issuing a CBDC. In his recent crypto executive order, President Donald Trump also prohibited Federal agencies from attempting to promote or issue a CBDC.
Powells clear statement might provide some relief to those concerned about the implications of CBDCs on personal freedoms and privacy.
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