Federal Reserve Chair Jerome Powell told the Senate Banking Committee on Tuesday that the central bank will not issue a central bank digital currency during his tenure, which ends in May 2026. The statement eliminates any prospect of a Fed-issued electronic dollar before that date.
Senator Bernie Moreno, Republican of Ohio, asked Powell to rule out the creation of such a currency. âWill you commit that, as long as you serve as chairman, the Federal Reserve will never introduce a central bank digital currency?â Moreno asked. Powell answered with a single word: âYes.â
The Fed has examined the concept of a digital dollar that would allow households and businesses to settle transactions instantly through accounts held directly at the central bank. Researchers within the Fed have questioned the practical benefit – noting that commercial banks already move funds electronically within seconds through the Fedwire but also ACH networks.
Advocates argue that a Fed-issued token would cut settlement risk and lower interchange fees. Critics counter that a programmable dollar would grant the government a real time record of every retail purchase – eroding financial privacy. Bitcoin proponents add that a Fed token would compete with decentralized cryptocurrencies – reducing their appeal as censorship resistant payment tools.
Powell previously described the Fed as ânowhere closeâ to launching a digital currency. His testimony on Tuesday removes any ambiguity – no Fed-issued digital dollar will appear before Powell leaves office.