Chairman of the US Federal Reserve Jerome Powell addressed the Senate on Thursday, emphasizing that the US is “nowhere near” developing a central bank digital currency (CBDC).
Powell highlighted that the Fed is not close to implementing a digital dollar, as it is not interested in a system that would require user data. He stated that the US government would not endorse a service that allows monitoring of citizens’ transactions. “We’re nowhere near recommending – or let alone adopting – a central bank digital currency in any form,” Powell affirmed, reassuring that “people don’t need to worry about it.”
He explained that if a digital dollar were to be introduced in the future, it would be managed through the banking system rather than directly by the Federal Reserve. Powell noted that the central bank would require authorization from the White House and Congress to proceed with a US digital currency.
While research on CBDCs is still in its early stages, there has been significant pushback from Republican lawmakers, including Donald Trump, who have voiced strong opposition to a digital currency. Senator Ted Cruz, who proposed legislation in February to prevent the Federal Reserve from supporting a CBDC, asserted that such a currency could be used to track citizens.