Powell: No US CBDC During My Tenure

Federal Reserve Chair Jerome Powell has reiterated that the U.S. will not introduce a Central Bank Digital Currency (CBDC) during his tenure. In a recent statement, Powell emphasized that the Fed is still in the early stages of exploring the potential of CBDC and has no immediate plans to launch one.

The Fed Chair's comments come as other major economies, such as China and the European Union, are actively exploring and piloting their own CBDCs. Powell acknowledged the global interest in CBDCs but stressed that the U.S. will take a cautious approach to ensure the stability and security of the financial system.

The Fed has been studying the potential implications of CBDCs for some time. In a report published in January 2022, the Fed outlined the potential benefits and challenges of CBDCs, including increased financial inclusion, faster and cheaper cross-border payments, and enhanced monetary policy tools. However, the report also highlighted concerns about privacy, cybersecurity, and the potential for CBDCs to displace physical cash.

Powell's statement is in line with the Fed's previous stance on CBDCs. In a speech delivered in August 2021, Powell noted that the Fed was not yet convinced that a CBDC was necessary for the U.S. and that it would continue to monitor developments in other countries before making a decision.

The Fed's cautious approach to CBDCs is not surprising, given the complex nature of the technology and the potential implications for the financial system. As Powell noted, the Fed is committed to ensuring that any new technology is safe, effective, and benefits the American people.