Federal Reserve Chair reveals US CBDC not happening anytime soon

credit: Shutterstock
credit: Shutterstock

The Chairman of the Federal Reserve Jerome Powell recently told Congress that the US is not remotely close to establishing its own Central Bank Digital Currency (CBDC). 

Powell told the Senate Banking Committee that the Federal Reserve is not focused on creating a framework for a CBDC and that it has no interest in making accounts to support the digital currency that would interfere in its current banking system. 

He said: “People don’t need to worry about a central bank digital currency, nothing like that is remotely close to happening anytime soon.”

A highly contentious subject in the US right now revolves around CBDC transactions and the ability for government officials to be able to trace all its data from end-to-end users. 

Powell acknowledged the fears over privacy controls presiding over a potential digital dollar, assuring that if he was still in his position and a US CBDC became a realisation, that the government would not have an individual for this kind of practice. 

“If that were a government account, that the government would see all your transactions, that’s just something we would not stand for or do or propose here in the US,” stated Powell. 

“If we were to ever do something like this, and we’re a very long way from even thinking about it, we would do this through the banking system. The last thing we, the Federal Reserve, would want would be to have individual accounts for all Americans.”

There has been staunch opposition to a US CBDC, in particular from the Republican Party, with Donald Trump being one of the most vocal opposers. 

During an interview with FOX Business, the former US President declared that if he were to be elected as President again in November, he would kill any notion of a CBDC on his first day in office. 

He told FOX Business’ Maria Bartiromo: “It’s very dangerous. One day you don’t have any money in your account, it can be a very dangerous thing.

“If I am the president, on day one, we will nix central bank digital currency. Done. Dead. Not happening in this country.”

Elsewhere in the Republican Party, Ted Cruz introduced a draft bill last year calling for an outright ban on CBDCs in the US which heavily focused on the dangers of the track and trace ability of the digital currency. 

The US’ stance on CBDCs pales in comparison to that of a majority of countries across the globe. Where the US has still yet to launch a CBDC research project, countries such as China, India and more have begun pilot testing wholesale CBDCs to formalise use cases as a potential added currency to sit alongside its native currency.