US Federal Reserve Signals Potential for CBDC

Recently leaked comments from a closed-door meeting between US Federal Reserve Chair Jerome Powell and senior democrats have sparked speculation about the accelerated development of a Central Bank Digital Currency (CBDC), commonly referred to as a ‘Digital Dollar.’ 

This revelation comes amidst a significant surge in the prices of major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), highlighting the growing urgency for central banks to adapt to the rapidly evolving financial landscape.

CBDC Could be Launched if Approved by Congress

The emergence of cryptocurrencies has spurred discussions among policymakers worldwide about the need to modernize existing monetary systems. With private digital currencies gaining traction, central banks are under pressure to explore the feasibility of issuing their digital currencies as a means of maintaining monetary sovereignty and enhancing financial inclusion.

Moreover, the unprecedented surge in crypto prices has captured the attention of mainstream investors and policymakers alike, underscoring the need for regulatory clarity and innovative responses from central banks. A CBDC could serve as a viable alternative to privately issued cryptocurrencies, providing consumers with a reliable and regulated digital payment solution.

However, Powell told the Democrats that CBDC would only be launched if authorized by Congress. Additionally, regulatory frameworks will need to be established to govern the issuance, distribution, and usage of digital currencies within the broader financial ecosystem. As central banks grapple with the implications of the digital revolution, the prospect of a Digital Dollar becoming a reality is closer than ever before. 

Presidential Candidate Vows to Stop CBDC Implementation 

In January, United States Presidential Candidate Robert F. Kennedy promised to make sure that CBDC does not see the light of day in the country once he is elected as president. For Kennedy, there is a need for the U.S. to have an independent currency, void of government control. 

Also, Kennedy talked about other threats of having a Digital Dollar. He tagged CBDC “a calamity for human rights and civil rights.” For context, the politician talked about China, the Asian nation that has its local CBDC, the “digital yuan,” linked to an extensive social credit system.

Donald Trump Against US CBDC Implementation 

Noteworthy, Kennedy is not the only U.S. politician against the implementation of a CBDC. Donald Trump, a billionaire and a former President of the United States stated that he would “never allow” the creation of a CBDC in the country.

He made this statement while campaigning in Portsmouth, New Hampshire for the 2024 presidential elections. Trump recently reiterated his stance on the CBDC matter.