Fed Chair Jerome Powell has confirmed that the Federal Reserve will not pursue a central bank digital currency, backing legislative efforts and an executive order blocking its creation.
Fed Chair Confirms US Won't Launch Digital Dollar Under His Watch
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Powell Shuts Down CBDC Fears With One Word
Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee on Feb. 11, where he responded to concerns about a potential central bank digital currency ( CBDC) in the United States.
During the hearing, Senator Bernie Moreno (R-OH) asked him directly:
Something that concerns me a lot is the idea that we would even look like China in any way. Can I have your commitment that as long as you are the Chairman of the Federal Reserve System that we will never have a central bank digital currency?
Powell simply answered, “Yes.”
His statement aligns with efforts by lawmakers and President Donald Trump to block the creation of a CBDC. On Jan. 23, 2025, Trump signed an executive order prohibiting federal agencies from developing or promoting a CBDC, marking a shift from prior discussions on a digital dollar. The administration has supported the expansion of digital assets and blockchain technology while cautioning that a CBDC could pose risks to financial stability and individual privacy.
Legislation has also been introduced to prevent a CBDC from moving forward. The No CBDC Act, proposed in both the House and Senate, seeks to bar the Federal Reserve from issuing a digital currency without direct congressional approval. Supporters of the bill argue that government-backed digital money could undermine financial privacy and increase federal oversight of personal transactions.
Powell has repeatedly stated that the Federal Reserve is not close to launching a digital dollar. He has emphasized that any decision on a CBDC would require explicit congressional authorization and broad public support. While the Fed has been studying the potential effects of such a currency, no formal steps have been taken toward implementation.
Critics of CBDCs warn of government overreach, often pointing to China’s digital yuan as an example. Detractors argue that China’s use of its CBDC to track and control consumer spending threatens financial autonomy. Congressman Tom Emmer, sponsor of the Anti-Surveillance State Act, warned that a U.S. CBDC could “give the federal government the ability to monitor and control individual Americans’ spending habits.”
Globally, CBDC development continues to gain momentum. A report from the Atlantic Council found that 134 countries, representing 98% of the global economy, are researching digital currencies. Among them, 66 are in advanced stages, including pilot programs or full-scale rollouts. China has expanded its digital yuan trials, while the European Central Bank is progressing with its multi-year digital euro initiative. Other nations, such as India, Brazil, and Russia, are also making strides in CBDC implementation.
