Federal Reserve Chair Denies Imminent Launch of Central Bank Digital Currency

Federal Reserve Chair Jerome Powell quashed any speculation about the imminent launch of a central bank digital currency (CBDC) in the United States during a recent hearing before the Senate Committee on Banking, Housing, and Urban Affairs. Powell emphasized that the Federal Reserve is “nowhere near” recommending or adopting a CBDC in any form.

Powell’s remarks on March 7 came amidst a backdrop of increased interest in CBDCs globally. Hong Kong’s central bank announced a new initiative for a wholesale CBDC on the same day, while reports surfaced that the BRICS geopolitical bloc had initiated efforts toward a blockchain-based payments system. Additionally, a central bank official from the Philippines indicated that the country’s wholesale CBDC could be completed by the end of the year.

Addressing concerns regarding the potential surveillance associated with a retail-focused CBDC, Powell pointed to China’s digital yuan as an example. He emphasized that even if the Federal Reserve were to consider launching a CBDC, it would be “a very long way from even thinking about” it. Powell reassured that any CBDC implementation would be conducted “through the banking system.”

Powell vehemently dismissed the notion of individual accounts for Americans at the Federal Reserve, stating, “Only banks have accounts at the Fed, and that’s the way we’re going to keep it.” He emphasized that people need not worry about the prospects of a central bank digital currency, as it is “nothing like that is remotely close to happening anytime soon.”

Powell reiterated that the decision to develop a retail CBDC lies with Congress, emphasizing the necessity of congressional approval for such an initiative. He has consistently maintained this stance, underscoring the importance of legislative authorization in the Federal Reserve’s considerations regarding CBDCs.

The Federal Reserve’s stance on CBDCs contrasts with the growing interest and initiatives observed in other parts of the world. While countries like China and the Philippines make strides toward developing digital currencies, Powell’s statements emphasize a cautious approach by the United States central bank.

Powell’s remarks serve to temper expectations and clarify the Federal Reserve’s position on CBDCs amid increasing global attention and experimentation in the digital currency space. As discussions surrounding CBDCs continue, Powell’s emphasis on congressional authorization underscores the complex regulatory landscape surrounding digital currencies in the United States.

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Maria Irene
Maria Irenehttp://ledgerlife.io/
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.

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