Scott Bessent, nominated by President-elect Donald Trump for Treasury Secretary, said this in a Senate confirmation hearing on Thursday, dismissing the idea of the US issuing a CBDC. The hearing at the Senate Finance Committee left no doubt about Bessent’s opinion on the matter: “I see no reason for the U.S. to have a central bank digital currency.” He cautions the contrary will trigger further federal proceedings toward a digital dollar.
Bessent’s position comes as most federal agencies have embarked on researching the viability of a CBDC. Assuming it happens on January 20, as now tentatively planned, his confirmation could markedly alter the course of the government’s digital currency research and development efforts.
Opposition to CBDCs in line with republican criticism
Bessent termed such a move a bad idea, which marks most Republicans’ opinion about the seemingly encouraging idea of a U.S. CBDC. Ex-President Donald Trump had asserted as a presidential candidate in 2020 that he would not allow the adoption of a CBDC due, once again, to concerns over the invasion of privacy. Back in November 2023, Trump nominated Bessent, a famous investment manager, for the post of Treasury Secretary.
Similarly, opponents of CBDCs have also dealt with what is similar to the sentiment of the Anti-Surveillance State Act that the House of Representatives approved in May 2023. The bill aims to ban the Fed from issuing or operating a digital dollar because a CBDC is believed to threaten individuals’ privacy and heighten the government’s domination of transactions.
Contrasts with global CBDC trends
These remarks of Bessent suggest a stark divergence from worldwide developments involving central bank digital currencies. Statistics from the Atlantic Council indicate that 134 countries with 98 percent of the world’s Gross Domestic Product are researching CBDCs. For instance, China has launched and uses the digital Yuan, especially in trial scenarios like the Beijing Winter Olympics 2022. Several governments deem CBDCs to be developments that facilitate reform of the payment system and expand access to finance.
However, Bessent countered that a CBDC is most useful in ill-favored investment environments, which he said are ineffective opportunities for the U.S., the world’s largest economy. These comments may portend a wholesale scrubbing of digital currency projects in the incoming government.
Potential shift in U.S. policy
If true, Bessent’s potential leadership at the Treasury might turn the tide for federal research on CBDCs. Even though organizations like the Federal Reserve have been exploring the advantages and disadvantages of digital currencies, his words signal the lack of backing for further development of this technology. This could end with a reduction of the CBDC project or withdrawal in the United States, but other states will preserve and continue their work on such programs.