Nations intensify CBDC efforts while Fed’s Powell alleviates concerns about a digital dollar.

Federal Reserve Chair Jerome Powell stated that the United States is not considering and has no interest in a central bank digital currency (CBDC) that would monitor users’ activities. Powell made these remarks during a hearing before the Senate Committee on Banking, Housing, and Urban Affairs on March 7. This statement contrasts with recent developments in other regions, such as Hong Kong’s central bank’s push for a wholesale CBDC and reports of the BRICS geopolitical bloc’s work on a blockchain-based payments system. Furthermore, a Philippines central bank official announced that the country’s wholesale CBDC would be completed by the end of the year. Powell also addressed concerns about a retail-focused CBDC enabling surveillance, citing China’s digital yuan as an example. He emphasized that if the Fed were to launch a CBDC, it would be done through the banking system, and individual accounts for Americans would not be established. Powell reiterated that the Federal Reserve has no plans to introduce a central bank digital currency in the near future. He also affirmed that Congress would need to authorize the Fed to launch a retail CBDC. Data from the Atlantic Council reveals that 11 countries, mostly in the Caribbean, have already launched a CBDC, while 21 countries are conducting pilot trials, including China with its e-yuan, and 33 countries are in the process of developing their CBDC implementations. In March 2022, President Joe Biden signed an executive order urging the Fed to explore the possibility of a CBDC. The concerns and doubts of lawmakers are driving proposed crypto regulations in the United States.