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US Federal Reserve Chair Jerome Powell Discusses Central Bank Digital Currency During Senate Hearing
US Federal Reserve Chair Jerome Powell recently addressed lawmakers during a Senate Banking Committee hearing, where he reiterated that the Fed is far from adopting or recommending a central bank digital currency (CBDC). Powell’s testimony aimed to alleviate concerns surrounding privacy issues, emphasizing that the Federal Reserve has no intention of implementing a system that would allow for government surveillance of American citizens’ financial transactions.
Privacy Protection a Top Priority
Powell emphasized the Fed’s current stance on the concept of a digital dollar, emphasizing that the US is not ready to proceed with any form of CBDC at this time. This statement comes amidst global discussions on the potential benefits and consequences of central bank-issued digital currencies. Unlike other countries where digital currency transactions can be tracked by the government, Powell assured lawmakers that privacy would be a top priority for the Fed.
“If that were a government account, that the government would see all your transactions, that’s just something we would not stand for or do or propose here in the United States.”
The discussion around a US CBDC has sparked debates among politicians and the public, with concerns focusing on privacy and potential government surveillance. Powell’s remarks directly oppose these concerns, emphasizing the Fed’s commitment to avoiding any system that could enable spying on American citizens.
Congressional Approval Necessary
Powell also delved into the operational aspects of a potential CBDC, mentioning that if the Fed were to move forward with such a currency, it would collaborate with the banking system to manage accounts. This approach aims to prevent direct government access to individual transaction data, thus safeguarding personal financial information within the realm of private institutions.
Furthermore, Powell stressed the significance of obtaining legislative approval for any CBDC initiative, underscoring the Fed’s dedication to maintaining lawful and transparent governance. In response to Senator Cynthia Lummis, Powell affirmed that the regulator would seek explicit authorization from Congress and the Executive Branch before proceeding with a digital dollar.
Privacy-Centered Approach
The Fed’s cautious and deliberate approach to the idea of a digital dollar reflects a careful consideration of the potential implications on privacy, monetary policy, and the financial system as a whole. Powell’s emphasis on privacy and governmental oversight underscores the Fed’s commitment to upholding American values of freedom and privacy in the digital age.
Overall, Powell’s statements during the Senate hearing signify a pivotal moment in the ongoing global discourse on digital currencies, with the Fed’s unwavering commitment to safeguarding the financial sovereignty and privacy of US citizens in an increasingly digital world.
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