Federal Reserve Chair Powell Says There’s A Low Chance Of CBDC Launching Soon

Federal Reserve Chairman, Jerome Powell, has recently revealed to the Congress that the launch of the United States Central Bank Digital Currency (CBDC) is still far. He communicated with the Senate Banking Committee, claiming that the Federal Reserve shows no commitment to building a foundation for CBDC development.

According to the latest report, Powell also highlighted the less dedication of the banking system in creating accounts that could support the country’s digital currency.

Furthermore, he said that there’s no need to stress about the digital currency of the nation’s central bank. This is because there is a very low chance of it coming soon.

A recent debate in the UK reveals that the government can potentially provide a digital currency that can be transferable between customers.

Powell Acknowledges Worries Concerning Privacy On The Digital Currency

Powell has acknowledged the worries surrounding privacy control governing this possible digital currency. He mentioned that the government will be able to view users’ transactions from its account

He has assured that if he still retains his seat and the United States Central Bank Digital Currency comes to reality, the government wouldn’t be able to do that.

He continued, stating that no one would accept that and it’s not debatable in the United States, just like in China.

A United States Senator, Cynthia Lummis, questioned Powell about his acceptance of the fact that launching a Central Bank Digital Currency needs congressional approval. His answer was “Yes I do.” However, last year, he didn’t give a similar response.

Different wholesale CBDCs are related to Interfinancial and securities settlement. For instance, the UK’s Fnality went live with digital tokens supported by an aggregate central bank account.  Top U.S. securities financial System Infrastructure placed significant investment last year in Fnality. The institution announced its latest discussion for a possible application with the Federal Reserve.

CBDCs Shares Similarities With Cryptocurrencies

Central Bank Digital Currencies are a type of digital money provided by the central bank of a nation. They share similarities with cryptocurrencies. However, there’s a slight difference as CBDCs have a fixed value by the central bank. It is also equal to the nation’s fiat currency.

Several countries are developing central bank digital currencies, with some implementing them. Many countries aim to transform their financial system. They are focused on digital currencies. However, it’s vital to understand what these currencies are and their position in society.

The main aim of Central Bank Digital Currencies is to provide customers and businesses with financial security, accessibility, convenience, transferability, and privacy. They could also reduce the cost of cross-border transactions and the maintenance cost of complex financial systems.