FX.co ★ Powell promises not to create CBDC without legislative approval

Federal Reserve Chair Jerome Powell promised US Senator John Kennedy that he would never create a central bank digital currency (CBDC). But will he stick to his word? What if circumstances change, forcing a rethink of the current stance?

During Senate discussions, John Kennedy voiced concerns that a US digital currency could be used to monitor citizens' financial transactions. Powell, however, assured the senator that the Fed would not launch a CBDC without clear approval from Congress and the president.

Powell stressed that the Fed was not developing a CBDC and that it had no authority to do so without legislative approval. He added that any decisions about a central bank's digital currency would be made through democratic processes.

Experts see this statement as a significant shift in the Fed’s stance. The Fed has previously explored the idea of a digital dollar. While central banks worldwide continue to research and develop their own CBDCs, the US remains conservative on the matter.