Federal Reserve Chair Jerome Powell said the United States would not issue a central bank digital currency, or CBDC, as long as he remains the head of the organization.
The announcement came during a hearing of the Senate Banking Committee on Tuesday. During the hearing, Senator Bernie Moreno (R-OH) asked Powell to commit that the United States would never have a CBDC as long as he was the head of the Federal Reserve System.
“Yes,” Powell responded.
Moreno called Powell’s one-word answer important, and said it would prevent the United States from “looking like China” in any way. Powell’s response runs counter to previous indications that the Federal Reserve was considering creating a CBDC.
“For far too long, the Federal Reserve has maintained a legal grey area around the possibility of a U.S. central bank digital currency, or CBDC,” said Cato Institute Policy Analyst Nicholas Anthony in an emailed statement. “Federal Reserve Chair Jerome Powell’s commitment to never issue a CBDC is a welcome change of pace. CBDCs present risks to financial freedom, privacy, and markets.”
