Federal Reserve Chair Jerome Powell emphasized that the United States is currently far from considering or adopting any form of central bank digital currency (CBDC), particularly one that surveils users.
Speaking before the Senate Committee on Banking, Housing, and Urban Affairs on March 7, Powell stated that the Fed is not recommending or pursuing a CBDC at this time.
This statement coincides with Hong Kong’s central bank launching efforts for a wholesale CBDC and reports of the BRICS bloc working on a blockchain-based payments system. Additionally, a Philippine central bank official mentioned plans for completing their wholesale CBDC by year-end.
Powell addressed concerns regarding a retail-focused CBDC enabling surveillance, citing China’s digital yuan as an example. He assured that if the Fed were to consider a CBDC, it would be facilitated through the banking system, not individual accounts with the Fed.
Powell reiterated that any decision regarding a retail CBDC would require congressional authorization, and it is not within the Fed’s authority to introduce one without legislative approval.
As of December 2023, 11 countries, mainly in the Caribbean, have launched CBDCs, while pilot trials are ongoing in 21 countries, including China’s e-yuan. An additional 33 countries are in the process of developing their CBDC implementations.
President Joe Biden’s March 2022 executive order urged the Fed to explore the possibility of a CBDC, indicating interest at the executive level.
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