The Chair of the Federal Reserve, Jerome Powell, has stated that the Fed is not considering a central bank digital currency (CBDC) in the U.S. and has no interest in a system that would allow the Fed to view user data. During a Senate Banking Committee hearing on Thursday, Powell clarified that the Fed is not close to recommending or adopting a CBDC, and people should not be worried about it.
Powell also addressed concerns about the potential for the government to track user activity through a digital dollar, stating that the U.S. would not propose or stand for such intrusion into people’s transactions. He contrasted this with China, where the government can monitor user activity through their digital currency.
Republican politicians, including Donald Trump, have expressed anger towards the idea of a CBDC being launched by the federal government, believing it would lead to surveillance of their citizens’ transactions. Powell reiterated that the Fed is only studying the concept and would only move forward with specific authorizations from Congress and the White House.
He also stated that the Fed would use the existing banking system to manage people’s accounts if a digital dollar were to be implemented. This would ensure that the Fed would not have individual accounts for all Americans, as that is not something they want.
When asked by Senator Cynthia Lummis if the Fed could launch a CBDC without congressional authorization, Powell reaffirmed that they would not do so without proper authorization.
In conclusion, the Fed is not currently considering a CBDC in the U.S. and would only move forward with proper authorization from Congress and the White House. The Fed also has no interest in a system that would allow them to view user data.
