The US Federal Reserve will not roll out a central bank digital currency (CBDC) anytime soon, according to Fed Chairman Jerome Powell.
During the Senate Banking, Housing and Urban Affairs Committee hearing earlier this week, Powell said discussed the central bank’s stance on a CBDC, as the Biden administration pushed for continued research and evaluation of the risks and benefits of creating a digital dollar.
“We are not recommending a central bank digital currency anywhere, or let alone its adoption in any form, but the idea is that as technology has evolved, money has become digital.
If you look at your bank account, people don’t own those physical dollars. They are digital. The idea was that the government could create a digital form of money that people could transfer among themselves.”
Amid privacy concerns about the use of digital money, Powell says the Fed doesn’t want a CBDC that allows the government to see people’s transactions.
“That’s just something that we wouldn’t stand for or do or propose here in the United States. That’s how it works in China, for example.”
He says if the US were ever to implement a CBDC, it would be through the banking system.
“If we ever did something like this, and we’re a long way from thinking about it, we would do it through the banking system.
The last thing we, the Federal Reserve, would want is for all Americans, or any Americans, to have individual accounts. Only banks have accounts for that. That’s how we’re going to keep it going.
It’s just a matter of following the technology as it evolves and in a way that better serves the public. People don’t have to worry about a central bank digital currency, and something like that isn’t going to happen anytime soon.”
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