News - "Don't worry about a CBDC."

By Luc Vesters

"Don't worry about a CBDC."

"Don't worry about a CBDC."

US Federal Reserve (Fed) Chairman Jerome Powell tried to reassure US citizens during a Senate hearing. A CBDC in the US would not be built so that the US government could spy on people.

"We are a long way from recommending or even introducing a central bank digital currency in any form," Powell said during a hearing on monetary policy. He added before the Senate Banking Committee that there was "no reason to worry" about a CBDC.

Republican politicians in particular expressed concerns that a CBDC would allow the state to monitor citizens' transactions. Most recently, both Donald Trump and Democrat Robert Kennedy made their opposition clear.

According to the Atlantic Council, 130 countries, including the United States, are currently conducting trials of a CBDC. The ECB has recently shown particular resolve with its controversial plans for a digital euro.

The Federal Reserve has also explored the possibility of issuing a CBDC and published a report last year outlining the pros and cons. So far, however, several U.S. central bankers have pretty much dismissed the idea.

Even if the Fed were ever to introduce a digital dollar, Powell said it would only be possible through the banking system. "Only banks have accounts with the Fed and that should remain the case," he told the Senate committee.

Powell has previously stated that the Fed will wait for specific authorizations from Congress and the White House. Only then could it move forward with the introduction of a U.S. CBDC.

Meanwhile, the digital euro is being defended much more resolutely by the ECB. The official preparatory phase has begun.

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