Jerome Powell, the Chair of the Federal Reserve, clarified the United States' position on developing a central bank digital currency (CBDC), emphasizing privacy concerns and the country's current stance on the matter.
Powell asserts that the US is "nowhere near" introducing a CBDC and has no interest in a system that would allow for user surveillance.
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This statement was made during a Senate Committee on Banking, Housing, and Urban Affairs hearing on March 7.
Powell reiterated the Federal Reserve's stance on the need for Congressional approval before any potential introduction of a CBDC in the US, addressing concerns raised by Senator Cynthia Lummis about the Fed's authority to create a CBDC without legislative authorization.
Powell also highlighted the Federal Reserve's commitment to privacy, referencing concerns about potential surveillance reminiscent of China's digital yuan, and stated:
That's just something we would not stand for, or do, or propose here in the United States.
His remarks clarify that if a US CBDC were ever to be developed, it would be executed through the banking system, without individual accounts at the Fed for Americans.
This statement comes against the backdrop of significant global CBDC activity, with 11 countries having launched a CBDC, 21 conducting pilot trials, and 33 in the development phase.
Meanwhile, the US maintains a cautious and deliberate stance, ensuring that future developments align with the nation's values and legal framework.
The international flurry of activity in the CBDC arena has also been marked by the BRICS bloc's exploration of developing a blockchain and digital technology-based payment system to enhance global financial independence and efficiency.
