Scott Bessent, nominee for U.S. Treasury Secretary under Donald Trump, asserts that the United States does not need to launch a central bank digital currency (CBDC). During a confirmation hearing, he argued that the digital dollar would not provide the same benefits for the U.S. as it might for other countries.
What is CBDC?
A CBDC is a digital version of fiat currency regulated by a country’s central bank. This digital currency serves as a blockchain-based alternative to traditional cash and is under government oversight.
The U.S. Approach to Digital Currency
Bessent contends that the U.S. dollar offers a broader range of investment options compared to other currencies, negating the need for a CBDC. He pointed out that countries with currencies like the Chinese yuan feel compelled to adopt digital currencies.
“Those holding U.S. dollars can invest in a wide array of secure U.S. assets.”
Federal Reserve’s Position
In 2022, the Federal Reserve published a discussion paper examining the pros and cons of a potential CBDC. However, no decision has been made regarding the implementation of a digital dollar so far.
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