The United States is at a distant stage from considering the adoption of any form of central bank digital currency (CBDC)and even if it were contemplatedthe Federal Reserve has no interest in one that supervises the transactions of its usersstated the president of the Federal Reserve, Jerome Powell.
“I want to clarify that we are very far from recommending or adopting even a central bank digital currency in any form,” Powell said during a hearing before the Senate Banking, Housing and Urban Development Committee on March 7.
These statements coincide with the day when the central bank of Hong Kong launched a new initiative for a wholesale CBDC and days after the BRICS geopolitical bloc will supposedly begin working on a blockchain-based payment system.
Regarding concerns about a consumer-facing CBDC that could allow for surveillance and “that the government would see all of your transactions,” POwell highlighted China’s digital yuan as an example, saying, “That’s something we wouldn’t allow, or do, or propose here in the United States.”“.
The creation of the digital dollar is diluted
Should the Fed ever consider launching a CBDC (which is “a long way from thinking”), it would be done “through the banking system,” Powell added. “The last thing we, the Federal Reserve, would want would be have individual accounts for all Americansor any American for that matter,” he said, noting that only banks have accounts at the Fed, and that’s how it will stay.
Powell reiterated his position that it is up to Congress to grant the Federal Reserve permission to create a CBDC for the consumer and affirmed this position again during the hearing.
Senator Cynthia Lummis raised concerns about the Fed creating a CBDC without legislative authorization, asking Powell: “Do you still agree that the Federal Reserve cannot introduce a US central bank digital currency without authorization of Congress?” To which Powell replied, “Yes, I am.”
According to December 2023 data from Washington DC think tank the Atlantic Council, 11 countries (mostly in the Caribbean) have launched a CBDC, with active pilots in 21 countries, including China’s digital yuan, and 33 countries are in the process of developing their CBDC implementations.
President Joe Biden signed a executive order in March 2022 urging the Fed to explore the implementation of a possible CBDC.
Source: Ambito
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