TLDR
- Trump’s Treasury Secretary nominee Scott Bessent firmly opposed US CBDC development during Senate confirmation hearing
- Bessent’s stance aligns with Trump’s previous promise to “never allow” a US CBDC if reelected
- Currently 134 countries, representing 98% of global GDP, are exploring CBDCs
- The House passed the Anti-Surveillance State Act in May 2024 to restrict Federal Reserve from issuing digital currencies
- Fed Chair Powell stated in August 2024 that the US is not seriously considering CBDC implementation
Scott Bessent, President-elect Donald Trump’s nominee for Treasury Secretary, made his position clear during Thursday’s Senate confirmation hearing: he sees no need for a United States central bank digital currency (CBDC). This statement marks a decisive shift away from current federal initiatives exploring digital dollar possibilities.
“I see no reason for the U.S. to have a central bank digital currency,” Bessent told the Senate Finance Committee. He expanded on his view, stating that CBDCs are better suited for “countries who have no other investment alternatives.”
The timing of Bessent’s remarks comes as the global financial landscape shows increasing interest in CBDCs. According to data from the Atlantic Council, 134 countries representing 98% of global GDP are currently exploring these digital currencies. This includes major economic powers like China, which has already tested its digital yuan during the 2022 Olympics in Beijing.
Bessent’s position aligns closely with Trump’s previous statements on the matter. In January 2024, Trump promised he would “never allow” a US CBDC if reelected to the presidency. The November nomination of Bessent, who founded Key Square Group and has served as a key economic adviser to Trump’s campaign, appears to reinforce this policy direction.
The stance also reflects broader Republican opposition to CBDCs. In May 2024, the House of Representatives passed the Anti-Surveillance State Act, which aims to prevent Federal Reserve banks from issuing digital currencies either directly or indirectly.
Current Treasury Secretary Janet Yellen has taken a different approach. As both Treasury Secretary and former chair of the Federal Reserve, Yellen has supported exploring CBDC options. This exploration gained momentum in March 2022 when President Biden issued an executive order calling for the “responsible development” of digital assets.
The Federal Reserve’s involvement in CBDC research dates back to 2021, with a detailed report released in 2022 examining potential benefits and risks. However, Fed Chair Jerome Powell has maintained a cautious approach, emphasizing that any digital dollar implementation would require congressional approval.
In August 2024, Powell commented on the state of US CBDC development, stating there was “nothing new” to report. “Some of them are actually seriously looking at implementing a CBDC,” Powell noted. “We’re really not.”
CBDCs come in two main forms: retail versions designed for public use and wholesale versions meant for interbank transactions. The concept has faced criticism from various quarters, particularly within the cryptocurrency community, where concerns about government surveillance capabilities have been raised.
Ethereum co-founder Vitalik Buterin shared his evolving perspective on CBDCs in a 2023 CNBC interview. He admitted to having “somewhat more hope [on CBDCs], probably, naively, five years ago,” referring to their intended transparency and verifiability features.
The Treasury Department has previously expressed concerns about the growth of private stablecoins, suggesting in an October 2024 report that these should eventually be replaced by a state-backed CBDC. This stance drew parallels to the late-1800s transition from privately-issued “wildcat” currencies to government-backed central currencies.
If confirmed as Treasury Secretary when Trump takes office on January 20, Bessent’s opposition to CBDCs could lead to a reversal of current federal research initiatives in this area. This potential policy shift comes at a time when other nations continue to advance their own CBDC programs.
The Federal Reserve’s current CBDC research efforts, ongoing since 2021, could face new scrutiny under Bessent’s leadership. While these studies have examined various aspects of digital currency implementation, they have yet to result in concrete development plans.
Recent legislative actions, including the Anti-Surveillance State Act, have already created barriers to CBDC development at the federal level. Bessent’s appointment could further strengthen these restrictions and reshape the government’s approach to digital currency innovation.
As the global financial community continues to explore and implement CBDCs, Bessent’s statements suggest the United States may take a different path under the upcoming Trump administration. His position represents a clear break from current Treasury Department initiatives examining CBDC possibilities.
