The Federal Reserve is "nowhere near" making a recommendation on or even adopting a central bank digital currency, Chair Jerome Powell told lawmakers on Thursday.
If the central bank were to adopt a CBDC, it would be done through the banking system, said Federal Reserve Chair Jerome Powell, who testified on Thursday in front of the Senate Banking Committee.
"The last thing we would want — we, the Federal Reserve, would want — would be to have individual accounts for all Americans, or any Americans for that matter," Powell said. "Only banks have accounts at the Fed and that's the way we're going to keep it."
"People don't need to worry about a central bank digital currency. Nothing like that is remotely close to happening anytime soon," Powell added.
Republicans have voiced concerns that a CBDC could open the door for government surveillance of peoples' transactions. So far 130 countries, representing 98 percent of global GDP, are exploring a CBDC in some way, according to the Atlantic Council. That figure includes the United States.
The Federal Reserve has been exploring the possibility of issuing a CBDC and last year released a report examining the pros and cons of a CBDC, but central bank officials have thrown cold water on the idea in the past. Powell has also said the Fed won't issue a CBDC without congressional approval.
Sen. Cynthia Lummis, R-Wyo., asked Powell on Thursday to confirm his stance.
"Do you still agree that the Federal Reserve cannot introduce a U.S. central bank digital currency without congressional authorization" Lummis asked.
"Yes, I do," Powell said.
"That just really calms people's fears. The people are concerned that we could end up with something like the digital yuan that is used as a means of surveillance, so I think that that will calm some of those discussions down" Lummis said.
Conservative politicians have been charging against a CBDC for a while, citing worries that a CBDC could allow the government the ability to surveil transactions. Florida Governor and former presidential candidate Ron DeSantis signed a bill last year to ban the use of a federal CBDC in the Sunshine State.
Republicans in the House Financial Services Committee advanced a bill in September that would prohibit the central bank from issuing a CBDC directly to individuals and block the Fed from indirectly issuing one through an intermediary.
Some Democrats at the time criticized the bill, with Rep. Stephen Lynch, D-Mass, calling it "an act of breathless stupidity."
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