Fed Chair Jerome Powell Says no Secret Plans to Launch CBDC

Chairman of the Federal Reserve, Jerome Powell has denied any secret plans to launch a central bank digital currency (CBDC). He stated the disclaimer in a televised press conference on Wednesday.

Powell spoke in response to long-standing speculations that the Fed may be planning to launch a CBDC, which many Americans aren’t comfortable with. The suspicion is arising as many countries are currently pursuing CBDCs.

CBDCs have a bad reputation as they are widely seen as instruments of control over the public. In the U.S, studies have shown that most Americans are apprehensive when it comes to the idea of a CBDC.

No Plans for CBDC

Powell’s comment on the CBDC speculation came following his announcement that there’ll be no change to the current interest rates for a while. Addressing reporters during the conference, he said:

“It’s wrong to say that we’re working on a CBDC and that we’ve secretly got a lab here, where we’ve got one, and we’re just gonna spring it on Congress at the right moment. We don’t. Powell said. “I haven’t at all, in my own mind, made a decision that I think this is something the U.S. should be doing,” he added.

This statement is in line with Powell’s position on the subject of a CBDC in the past. He had earlier this month told the Senate Banking Committee the central bank was “nowhere near” making a recommendation or adopting a central bank digital currency.

CBDC and Digital Payments Research

Although Powell has made it clear that there are no plans to launch a CBDC in the near future, he admitted that some of his team members are researching the subject of CBDCs and digital payments, as this is a subject that is being considered by every central bank in the world.

“What we are doing, and I think what every major central bank is doing, we’re trying to stay in the frontiers of what’s going on in digital finance,” Powell also said. “These issues have become very front burner in the last five or six years.”

Indeed, many countries are working on CBDCs and are at different stages of the development of such digital currencies. China for example, which is a major economic rival of the U.S is currently testing the Digital Yuan for international payments, which is the final stage of the pilot before its launch for public use.

Other countries like Nigeria have launched their own CBDCs which haven’t received much acceptance. Eventually, every central bank, including the Fed may launch a CBDC as they try to stay ahead in financial technology to compete with decentralized cryptocurrencies like Bitcoin. 

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