Fed Chair Powell confirms regulators have no plans to recommend or adopt central bank digital currencies

Jerome Powell told lawmakers that the Federal Reserve has no plans to launch a central bank digital currency (CBDC) without explicit authorization from Congress.

Federal Reserve Chairman Jerome Powell ( Jerome Powell ) told a March 7 Senate Banking Committee hearing on monetary policy that regulators are far from adopting or even recommending a central bank digital currency (CBDC).Bitcoin Miner

Powell’s testimony during the meeting was aimed at allaying concerns about privacy issues, emphasizing that the Federal Reserve would not be involved in creating a system that would allow the government to spy on the transactions of U.S. citizens.

Upholding privacy

When confronted by the Senate, Powell emphasized the Fed’s current stance on the concept of the digital dollar, stressing that the U.S. is far from moving forward with any form of CBDC.This statement comes at a time of growing global discussion about the potential and implications of central bank-issued digital currencies.

Contrary to some international practices that allow governments to track digital currency transactions, Powell assured lawmakers that the Fed would prioritize privacy.

He said:

“If that were a government account, the government would see all of your transactions, and we would never accept nor propose such a program in the United States.”

The concept of a US CBDC has sparked debate among politicians and the public, with concerns often centering on privacy and government surveillance.

Republicans, including presidential candidate Donald Trump, have openly criticized the possibility that the federal government’s operation of digital currencies could invade individuals’ privacy.Litecoin DOGE Miner

Powell’s speech responded directly to these concerns, making clear his stance against any form of system that subjects Americans to surveillance.

Congressional Authorization

Powell further elaborated on operational details, noting that if the Fed aggressively moves forward with the CBDC, it will integrate the banking system to manage accounts, thereby avoiding direct government access to personal transaction data.

This approach is intended to preserve the integrity of personal financial activities and ensure that they are under the jurisdiction of private banking institutions rather than under government surveillance.

Powell also emphasized the importance of legislative approval of any CBDC initiative, as the Fed is committed to lawful and transparent governance. In response to Senator Cynthia Lummis (D-Calif.), he confirmed that regulators will seek clear authorization from Congress and the executive branch before moving forward with digital dollars.

The Fed’s cautious and measured approach to the idea of a digital dollar reflects a broader consideration of the impact such a currency could have on privacy, monetary policy and the banking system.

The Fed’s cautious and privacy-focused stance on the potential implementation of a U.S. CBDC marks a pivotal moment in the global discussion about digital currencies. As Powell made clear, any future developments will be strictly in line with U.S. values of privacy and freedom, ensuring that the financial sovereignty of U.S. citizens is not compromised in the digital age.