Fed Chair Powell Says CBDC Is Nowhere Close to Reality
In testimony before the Senate Banking Committee Thursday, Federal Reserve Chairman Jerome Powell firmly rejected notions that adoption of a central bank digital currency (CBDC) by the U.S. is imminent.
Powell also mentioned that it is not even actively under consideration at this point. His remarks come amidst a growing conservative political backlash against a CBDC.
Key details:
- Powell stated the Fed is nowhere near deciding on, let alone implementing a digital dollar.
- Emphasized that if any CBDC arises, banks will remain intermediaries, with no direct Fed accounts.
- Comments follow the escalating Republican pushback against perceived privacy threats from CBDCs.
“Nothing like that is remotely close to happening anytime soon,” Chairman Powell told lawmakers when asked about the chances of a digital dollar. He stated any potential future CBDC would only involve existing banks as financial intermediaries, never direct accounts held by everyday Americans with the Federal Reserve itself.
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Powell’s position aligns with remarks he has made in the past, which have aimed to manage expectations surrounding CBDCs. The Federal Reserve is currently investigating the technology primarily from a research and experimental viewpoint.
He highlighted that any eventual rollout would also require new Congressional authorization even before the Fed itself decided to pursue a full-fledged CBDC in earnest.
Powell’s statement comes amidst remarks against CBDC
The chairman’s latest remarks come amidst increasingly vocal warnings from Republican politicians in particular regarding privacy violations and increased government surveillance risks from CBDCs.
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Just this week, Wyoming Senator Cynthia Lumis sought confirmation from Powell that the Fed cannot proceed without Congressional approval.
While over 100 countries are now investigating CBDCs to some degree, skepticism appears high from both the Fed itself, based on Powell’s testimony, and U.S. politicians.
