The American Federal Reserve chairman Jerome Powell testifies before a hearing of the senate bank, housing and urban affairs about “the half -yearly monetary policy report at the congress” in Capitol Hill in Washton, US, 11 February 2025.
Craig Hudson | Reuters
Federal Reserve chairman Jerome Powell claimed Tuesday that the central bank will not develop its own digital currency as long as he is in charge.
The termination of a few years of speculation or the FED would participate in some of his global counterparts, including China, when developing a formal cryptocurrency such as Bitcoin or his many colleagues, Powell said during a hearing that the project would not continue.
“Can I have your commitment that as long as you are the chairman of the Federal Reserve System that we will never have a digital currency from the Central Bank?” Senator Bernie Moreno, R-Ohio, asked Powell during the chairman’s six-monthly testimony about monetary policy and regulations.
“Yes,” Powell replied.
“Thank you for that, I think that’s extremely important,” said Moreno. “It makes me very happy to hear you say that.”
Powell’s term when Fed Chief ends in May 2026.
The FED has been investigating the issue for at least four years and in 2022 released an extensive study that described the advantages and disadvantages without drawing a conclusion.
Over the years, several officials have expressed their concern, where most said there was no clear need for a CBDC and concern about privacy and other issues. Powell also emphasized that creating a CBDC would have required a legislative act of the congress, slightly less likely with a Republican majority who checks both rooms in Washington, DC
In the meantime, the Central Bank has launched its Fednow payment system that, in essence, tackles a number of problems that a Cryptocurrency supported by Fed would also accept.
Moreno asked Powell to continue to work on Fednow to make 24-hour money transfers more available.