The U.S. Federal Reserve is not rolling out a Central Bank Digital Currency (CBDC) anytime soon, according to Fed Chair Jerome Powell.
During the Senate Committee on Banking, Housing and Urban Affairs hearing earlier this week, Powell discussed the central bank’s stance on a CBDC as the Biden administration urged continued research and evaluation of the risks and benefits of creating a digital dollar.
“We’re nowhere recommending or let alone adopting a central bank digital currency in any form, but the idea is, as technology has evolved, money has become digital.
If you look at your bank account, people don’t hold those physical dollars. They’re digital. The thought was that the government could create a digital form of money that people could then transfer among themselves.”
Amid privacy concerns on the use of digital money, Powell says the Fed does not want a CBDC that will allow the government to see people’s transactions.
“That’s just something we would not stand for or do or propose here in the United States. That is how it works in China, for example.”
He says if the US were to ever adopt a CBDC, it would go through the banking system.
“If we were to ever do something like this, and we’re a very long way from even thinking about it, we would do this through the banking system.
The last thing we, the Federal Reserve, would want would be to have individual accounts for all Americans or any Americans, for that matter. Only banks have accounts for that. That’s how we’re going to keep it.
It’s just really a question of following technology as it evolves and in a way that serves the public better. People don’t need to worry about a central bank digital currency and nothing like that is remotely close to happening anytime soon.”
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