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Federal Reserve says it’s actually never creating a CBDC – The basis?

Federal Reserve says it's actually never creating a CBDC - The basis?

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TL;DR

  • Federal Reserve Chair Jerome Powell assured that the U.S. is not planning to create a Central Bank Digital Currency that would allow the government to monitor people’s transactions.
  • Powell emphasized that the Federal Reserve is far from even suggesting the idea of a digital dollar, let alone implementing one.
  • Any potential CBDC in the U.S. would operate through the existing banking system to avoid direct government surveillance of individual transactions.

Busting the bubble right at the outset, everyone’s favorite Chair of the Federal Reserve, Jerome Powell, made it very clear during a Senate hearing that the United States won’t be getting a central bank digital currency anytime soon, if ever. And no, this isn’t some bureaucratic foot-dragging. There’s actually a huge reason behind it, despite the conspiracy theories.

When I first read about the idea for a digital dollar, I thought, “Digital dollar? Sounds like Big Brother’s dream come true!” But I see now that I might have been wrong. Because Powell has outlined a scenario far removed from an Orwellian nightmare. According to him, if the U.S. ever creates a CBDC, it wouldn’t be through some dystopian setup where the government has its all-seeing eye on every transaction you make. That’s right, the Fed’s boss explicitly stated that the idea of the government snooping through your transactions is a big no-no in their book. So, if you’ve been losing sleep over the government tracking how many tacos you buy on a Tuesday, you can rest easy.

Interestingly though, America’s stance throws a stark contrast against places like China, where the government has launched a digital currency that allows for a level of surveillance that makes privacy advocates squirm. Powell’s commitment to privacy is a breath of fresh air but also raises questions about how a U.S. digital currency would even work. You know what I’m saying. He has suggested that if such a currency were to come into existence, it would lean heavily on the existing banking system to manage accounts, steering clear of any direct government oversight of individual transactions.

You’d think Powell’s reassurances would calm critics down, but nope, it’s turned into a political football. Some high-profile Republicans, with former President Donald Trump leading the charge, have been vocal about their suspicions. They’re convinced that the Federal Reserve is itching to launch CBDCs to spy on Americans. Despite Powell and other officials repeatedly explaining that they’re more in the brainstorming phase than anything concrete, no one seems to actually believe them.

So, where does this leave us?

I actually have no idea. We’re gonna have to wait and see.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Jai Hamid

Jai Hamid is a passionate writer with a keen interest in blockchain technology, the global economy, and literature. She dedicates most of her time to exploring the transformative potential of crypto and the dynamics of worldwide economic trends.

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