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Fed Chair Rejects US CBDC, Says It’s “Nowhere Near”
- As the European Union and Great Britain begin work on developing a central bank digital currency, the US is still biding its time.
- Federal Reserve Chair Jerome Powell was adamant that a USD-backed CBDC is still a long way away.
- The statement comes as politicians – particularly Republicans – have drummed up a ruckus about the government using a CBDC to spy on civilians.
- Powell ensured those in attendance individual CBDC accounts would be operated by the banks, rather than the government.
A world where crypto and traditional finance work together to create a stronger economy has become more of a reality over the past few months. Presidential candidate Donald Trump hinted at a world where the USD and crypto can co-exist, while the introduction of spot ETF trading has seen a swathe of TradFi institutions enter the digital asset space.
Related: CommBank Faces Backlash for Blocking Customer Crypto Purchases
Australian bank ANZ is working with Chainlink to create an AUD-backed stablecoin, while the European Central Bank is working on a project to create a digital, blockchain-powered Euro. However, when it comes to the USD, American policymakers are still playing hard to get.
Republican Politicians Warn Against CBDCs
The Chair of the Federal Reserve, Jerome Powell, was strong when quizzed on his stance regarding the potential introduction of a US-backed central bank digital currency (CBDC).
Nothing like that is remotely close to happening anytime soon…We’re nowhere near recommending, or let alone adoption, a central bank digital currency in any form.
Jerome Powell Powell’s comments were made in a public hearing with the Senate Banking Committee, after panic stations were raised among Republican politicians over CBDCs. The primary concern is that the American Government could use government-issued stablecoins to watch over civilian transactions. However, Jerome Powell assured the committee that this would never be the case.
If that were a government account, that the government would see all your transactions, that’s just something we would not stand for or do or propose here in the United States.
Jerome Powell Instead, the CBDC would be managed by the US banking system.
Related: Crypto Holdings in Super Funds Quadruple, ATO Figures Reveal
It’s unclear why giving banks access to transaction history is any better than giving it to a government (which is kind of the whole point of crypto in the first place). Regardless, the statement from Powell was enough to settle fears for the time being.
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
