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In recent testimony before the Senate Banking Committee, Federal Reserve Chair Jerome Powell addressed concerns about the potential adoption of a Central Bank Digital Currency (CBDC). Powell made it clear that the Federal Reserve is currently not considering recommending or adopting a CBDC.
Powell emphasized that the current system, where only banks have accounts at the Fed, will remain unchanged. He reiterated that any implementation of a CBDC would be done in collaboration with the banking system. Powell reassured the public that there is no need to worry about a central bank digital currency as it is not on the horizon.
The debate around a US CBDC has gained momentum, especially with concerns from Republicans about potential government surveillance of transactions. This debate is part of a larger global exploration of CBDCs, with 130 countries currently looking into their potential benefits and implications.
Despite the Federal Reserve’s research and a report on CBDCs released last year, Powell clarified that any decision to issue a CBDC would require congressional approval. This was confirmed during a question from Sen. Cynthia Lummis, R-Wyo., to which Powell responded affirmatively.
Legislative actions related to CBDCs have also been taken, including a bill in Florida signed by Governor Ron DeSantis prohibiting federal CBDC use in the state. Additionally, Republicans in the House Financial Services Committee have advanced a bill to prevent the Fed from issuing a CBDC directly to individuals.
For more insights on CBDCs and their potential impact on global finance, stay tuned to Global Crypto News for the latest updates.
