Federal Reserve Chair Jerome Powell asserted Tuesday that the central bank will not develop its own digital currency as long as he is in charge.
Ending several years of speculation whether the Fed would join some of its global counterparts, including China, in developing a formal cryptocurrency like bitcoin or its many peers, Powell said during a Senate hearing that the project would not go forward.
“Can I have your commitment that as long as you’re the chairman of the Federal Reserve system that we will never have a central bank digital currency?” Sen. Bernie Moreno, R-Ohio, asked Powell during the chair’s semiannual testimony on monetary policy and regulation.
“Yes,” Powell responded.
“Thank you for that, I think that’s extremely important,” Moreno said. “It makes me very happy to hear you say that.”
Powell’s term as Fed chief ends in May 2026.
The Fed has been examining the issue for at least four years, releasing an extensive study in 2022 that detailed the advantages and disadvantages without drawing a conclusion.
Over the years, multiple officials have raised concerns, with most saying there was no obvious need for a CBDC and citing concerns over privacy and other issues. Powell also has stressed that creating a CBDC would have required a legislative act from Congress, something less likely with a Republican majority controlling both chambers in Washington, D.C.
In the meantime, the central bank has launched its FedNow payments system that essentially addresses a number of issues that a Fed-backed cryptocurrency also would take on.
Moreno asked Powell to continue work on FedNow to make 24-hour money transfers more widely available.