US Treasury Secretary candidate sees 'no reason' for CBDC

Scott Bessent believes CBDCs are only for countries that have no other investment options, but added that many countries are only issuing CBDCs “out of necessity.”

Scott Bessent, President-elect Donald Trump's pick for US Treasury Secretary, said there is “no reason” for the US to own a central bank digital currency (CBDC).

Mr. Bessent was speaking at his nomination hearing before the Senate Finance Committee on January 16th. The hedge fund manager was responding to a question from Republican Sen. Marsha Blackburn about how he would approach the U.S. CBDC debate.

In response, Bessent added, “I see no reason for the United States to have a central bank digital currency. In my opinion, a central bank digital currency is for countries that have no other investment options.” , adding, “Many of these countries are doing it out of necessity, but if the U.S. has the U.S. dollar, it can have a variety of currencies.” It's a very safe asset. ”

Exploring CBDCs

Many countries are already exploring the potential of CBDC. For example, in 2022 the Brazilian Central Bank announced that it would launch Drex, a CBDC, at the end of 2024.

In August 2023, Russia launched its first CBDC pilot with the participation of 13 banks. A report at the time stated that the country's CBDC would become operational in 2025.

To date, only three countries have launched CBDCs: the Bahamas, Jamaica, and Nigeria.

However, the US is reluctant to issue digital currencies. However, despite ongoing research into the feasibility of a CBDC in the U.S., Federal Reserve Chairman Jerome Powell said in 2021 that the agency has no plans to launch a CBDC anytime soon. said.

Powell added that it would take “years, not months” for the U.S. to develop a digital currency, and said he would consider it “very carefully.”

Nevertheless, President Biden signed an executive order in 2022 aggressively calling for urgent action on policy regarding Bitcoin and other cryptocurrencies, and research and development of CBDC in the United States.