Fed Chair Powell Updates Lawmakers on Progress of US Central Bank Digital Currency
Federal Reserve Chairman Jerome Powell briefed members of Congress on the progress of the Fed’s central bank digital currency (CBDC) initiatives, emphasizing the need for congressional authorization if a CBDC is to be implemented. Additionally, Powell reportedly highlighted the necessity of establishing a framework for stablecoins.
Powell’s Meeting with House Democrats
During a closed-door meeting with Democrats from the House Financial Services Committee on Tuesday, Powell provided updates on the Fed’s CBDC efforts and discussed potential legislation related to stablecoins, as reported by Politico.
According to sources familiar with the meeting, Powell stated:
“If we’re going to have a CBDC, Congress needs to authorize it … We aren’t advocates, but we haven’t made a decision to recommend a CBDC to Congress.”
The Federal Reserve has been exploring the possibility of issuing a digital dollar, although Michael Barr, Vice Chair for Supervision of the Board of Governors of the Federal Reserve System, emphasized in September last year that research does not equate to decision-making regarding the development of the payments system.
Powell’s previous statements have highlighted ongoing public engagement and experimentation in the early stages of exploring a potential digital dollar.
Lawmaker Opposition and Stablecoin Regulation
Despite ongoing discussions, some lawmakers have expressed opposition to the creation of a digital dollar. Congressman Tom Emmer introduced the CBDC Anti-Surveillance State Act earlier this year, which garnered support from 75 U.S. lawmakers. Former President Donald Trump has also vowed to prevent the launch of a CBDC if he is re-elected.
In addition to CBDC discussions, Powell addressed stablecoins during the meeting with House Financial Services Committee members. He stressed the importance of establishing a regulatory framework for stablecoins and expressed his support for imminent legislation in this regard.
Powell emphasized the necessity of stablecoin regulation, stating that progress in this area is crucial and expressing his approval of the proposed legislative measures.
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