During Thursday’s Senate confirmation hearing, President-elect Donald Trump’s Treasury Secretary nominee, Scott Bessent, rejected the need for a U. S. central bank digital currency ( CBDC ), assuaging concerns some crypto observers have long held.
” I see no cause for the U. S. to have a central bank digital money”, Bessent told the Senate Finance Committee. A central banks digital money is, in my opinion, for nations who have no other investment options.
Bessent’s comments are a significant departure from how different federal agencies have looked at the possibility of a digital currency issued by the central bank.
If Bessent is confirmed as the Treasury Secretary when Trump sworn in as president on January 20, a potential turnaround of the CBDC research efforts of the federal government might be in play.
Bessent’s remarks at the Senate confirmation hearing coincide with Trump’s claim, made precisely a year ago, to “never help” a U. S. CBDC if reelected. Bessent was nominated by Trump in November of last year.
Additionally, Bessent’s position corresponds with the CBDCs ‘ broad Republican support.
The Anti-Surveillance State Act, which would prohibit Federal Reserve Banks from instantly issuing digital currencies, was passed by the House in May 2024.
Royal money, regional attention
Central banks digital currencies, or CBDCs, are online versions of a country’s or government’s fiat money. CDBCs have been explored for decades in the U. S. Two varieties now exist: one for financial, designed for the general public, and general CBDCs meant to facilitate international transactions.
Bessent’s comments come as 134 countries, representing 98 % of global GDP, are exploring CBDCs, according to Atlantic Council information. This includes significant economies like China, which has already tested its electric yuan at competitions like the Beijing 2022 Olympics.
In March 2022, President Biden issued an executive order for the “responsible development” of modern resources, citing how international monetary authorities are “exploring, and in some cases introducing” CBDCs.
The latest Treasury minister and former head of the Federal Reserve, Janet Yellen, is in favor of exploring CBDCs. In March last month, the Federal Reserve declared CBDCs as a “key work” to Congress.
Several years after their inception, central bank digital currencies ( CBDCs ) have faced widespread criticism from the crypto community, arguing they could amplify government surveillance.
Ethereum co-founder Vitalik Buterin claimed in an interview with CNBC in 2023 that CBDCs were someone he “had a little more hope]on [probably, blindly, five years ago], citing the clarity and verifiability promises that CDBCs were intended to own.
Everything fresh
The Federal Reserve has been studying CBDC application since 2021, and it published a thorough review in 2022 outlining the benefits and drawbacks.
Jerome Powell, the head of the Fed, has argued that any online currency would need the approval of Congress, noting that CBDCs were “nothing new” in August of last year.
Some of them are considering really implementing a CBDC, according to Powell at the time. ” We’re actually not”.
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