The United States is “nowhere near” any form of central bank digital currency (CBDC) and even if it was, the central bank has no interest in one that surveils users, says Federal Reserve chair Jerome Powell.
“I want to say that we’re nowhere near recommending or let alone adopting a central bank digital currency in any form,” Powell said in a March 7 hearing before the Senate Committee on Banking, Housing, and Urban Affairs.
It comes the same day as Hong Kong’s central bank launched a new push for a wholesale CBDC and days after geopolitical bloc BRICS reportedly started work on a blockchain-based payments system.
A Philippines central bank official also said on March 6 that the country’s wholesale CBDC would be completed by the end of the year.
Powell also addressed concerns that a retail-focused CBDC could allow for surveillance and “that the government would see all your transactions” — highlighting China’s digital yuan as an example.
“That’s just something we would not stand for, or do, or propose here in the United States.”
If the Fed was to ever launch a CBDC — which it’s “a very long way from even thinking about” — it would be done “through the banking system,” Powell added.
“The last thing we would want — we, the Federal Reserve, would want — would be to have individual accounts for all Americans, or any Americans for that matter,” he said.
“Only banks have accounts at the Fed, and that’s the way we’re going to keep it,” Powell asserted. “People don’t need to worry about a central bank digital currency, nothing like that is remotely close to happening anytime soon.”
Powell has long said it’s up to Congress to give the Fed permission to make a retail CBDC and he again affirmed that position during the hearing.
Related: US senators oppose Joe Biden’s CBDC plans
Senator Cynthia Lummis claimed there were concerns “about the Fed creating a CBDC without legislative authorization.”
“Do you still agree that the Federal Reserve cannot introduce a U.S. central bank digital currency without congressional authorization?” Lummis asked Powell.
“Yes, I do,” Powell responded.
December 2023 data from Washington D.C. think tank the Atlantic Council shows 11 countries — mainly in the Caribbean — have launched a CBDC. Pilot CBDC trials are active in 21 countries, including China’s e-yuan, and 33 are still developing their CBDC implementations.
President Joe Biden signed an executive order in March 2022 that urged the Fed to explore a possible CBDC.
Magazine: Lawmakers’ fear and doubt drives proposed crypto regulations in US
Also Read More: World News | Entertainment News | Celebrity News
