During Thursday's Senate confirmation hearing, Scott Besent, President-elect Donald Trump's Treasury secretary nominee, dismissed the need for a U.S. central bank digital currency (CBDC), allaying concerns long expressed by some cryptocurrency observers.

“I see no reason for the United States to have a central bank digital currency,” Besant told the Senate Finance Committee. “In my opinion, central bank digital currency is for countries that have no other investment alternatives.”

Besant's comments represent a sharp departure from how various federal agencies have explored the prospects of a digital dollar issued by the central bank.

If Besent is confirmed as Treasury Secretary when Trump is sworn in on January 20, it would be a potential reversal of federal government policy. Research initiatives for the Convention on Biological Diversity (CBDC). It could be in play.

Besent's statements at the Senate confirmation hearing are consistent with Trump's statements He promiseswhich was made exactly a year ago, in order to “never allow” the issuance of a digital currency for the US central bank if re-elected. Trump Besant nominated In November last year.

The position adopted by Picent is also consistent with broader Republican opposition to central bank digital currencies.

In May 2024, the House of Representatives approved State anti-surveillance lawwhich would restrict the Federal Reserve Banks from issuing digital currencies directly or indirectly.

Sovereign money, the national interest

Central bank digital currencies or CBDCs are Digital versions Of the paper currency of a state or country. CBDCs have been explored for years in the United States, and there are currently two types: retail ones, designed for the general public, and wholesale CBDCs aimed at facilitating interbank transactions.

Besant's comments come as 134 countries, representing 98% of global GDP, are exploring central bank digital currencies, according to the Atlantic Council. Data. This includes major economies such as China, which has already tested its own digital yuan at events such as the 2022 Olympics held in Beijing.

In March 2022, President Biden issued an order Executive order for the “responsible development” of digital assets, noting how global monetary authorities are “exploring, and in some cases introducing,” central bank digital currencies.

Janet Yellen, current Treasury Secretary and former Federal Reserve Chair, supports the idea of ​​exploring central bank digital currencies. In March of last year, the Fed Announce Central bank digital currencies are a “primary duty” of Congress.

Several years after their inception, central bank digital currencies (CBDCs) have faced widespread criticism from the cryptocurrency community, arguing that they could increase government surveillance.

In 2023, Ethereum co-founder Vitalik Buterin said in an interview interview with CNBC that central bank digital currencies were something he "had somewhat more hope for, perhaps naively, five years ago," citing the guarantees of transparency and verifiability that central bank digital currencies are designed to have.

Nothing new

Federal Reserve has been studying the implementation of a central bank digital currency (CBDC) since 2021, releases detailed report. a report In 2022 to study the potential benefits and risks.

However, Fed Chairman Jerome Powell emphasized that any digital dollar would require congressional approval, stating in August of last year that there was “Nothing new“To central bank digital currencies.

“Some of them are seriously considering implementing a CBDC,” Powell said at the time. "We really don't."

Modified by Sebastian Sinclair