Cryptocurrency

Fed Chair Powell’s Pledge: No Government Spying in a Potential US Digital Dollar

Federal Reserve Chair Jerome Powell has made it clear that the United States is far from adopting or even recommending a central bank digital currency (CBDC), addressing concerns over privacy and government surveillance during a recent Senate Banking Committee hearing on monetary policy.


TLDR

  • Federal Reserve Chair Jerome Powell confirmed that the regulator is far from adopting or even recommending a central bank digital currency (CBDC) in the United States.
  • Powell emphasized the Fed’s commitment to privacy, stating that the regulator would not engage in creating a system that allows government surveillance of American citizens’ transactions.
  • If the Fed were to move forward with a CBDC, it would integrate the banking system to manage accounts, avoiding direct government access to individual transaction data.
  • Powell reiterated the importance of legislative approval for any CBDC initiative, confirming that the Fed would seek explicit authorization from Congress and the Executive Branch before proceeding with a digital dollar.
  • The Fed’s cautious and privacy-focused stance on a potential US CBDC reflects a broader consideration of the implications such a currency might have on privacy, monetary policy, and the banking system.

Powell’s testimony aimed to alleviate fears expressed by politicians and the public alike, emphasizing the Fed’s commitment to upholding privacy and avoiding any form of government spying on American citizens’ financial transactions.

The Fed chair’s statements come amidst growing global discussions about the potential and implications of digital currencies issued by central banks.

Unlike some international approaches that allow for government tracking of digital currency transactions, Powell assured lawmakers that the Fed would prioritize privacy if it were to move forward with a CBDC.

He firmly stated that the Fed would not stand for or propose a system that would enable the government to see all individual transactions, directly countering concerns raised by critics, including presidential candidate Donald Trump.

Powell elaborated on the operational aspects of a potential US CBDC, noting that the Fed would integrate the banking system to manage accounts, thereby avoiding direct government access to individual transaction data.

This approach is designed to maintain the integrity of personal financial activities, ensuring they remain within the purview of private banking institutions rather than under governmental surveillance.

Moreover, Powell reinforced the importance of legislative approval for any CBDC initiative, confirming that the Fed would seek explicit authorization from Congress and the Executive Branch before proceeding with a digital dollar.

This commitment to lawful and transparent governance highlights the Fed’s cautious and measured approach to the idea of a digital dollar, reflecting a broader consideration of the implications such a currency might have on privacy, monetary policy, and the banking system.

The Fed chair’s testimony marks a critical moment in the ongoing global dialogue on digital currencies, as it underscores the United States’ dedication to aligning any future developments with American values of privacy and freedom.

By emphasizing the Fed’s stance against government surveillance and its commitment to working within the existing banking system, Powell has sought to reassure both lawmakers and the public that the financial sovereignty of U.S. citizens will remain uncompromised in the digital age.

The post Fed Chair Powell’s Pledge: No Government Spying in a Potential US Digital Dollar appeared first on Blockonomi.

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