TL;DR Breakdown
- US Treasury Secretary Scott Bessent has reiterated his firm opposition to a Federal Reserve-issued Central Bank Digital Currency.
- Bessent stated during his testimony that creating a CBDC would signal economic weakness and unnecessary government involvement.
- He believes digital assets should remain within the private sector and not be controlled by federal authorities.
US Treasury Secretary Scott Bessent reaffirmed his strong opposition to a Federal Reserve-issued Central Bank Digital Currency (CBDC). During his testimony to a House appropriations subcommittee, Bessent stated that CBDCs indicate economic weakness. His position aligns with President Donald Trump’s executive order restricting federal CBDC development.
Bessent emphasized that digital assets should remain private and not under federal control. He argued that the US economy does not require a CBDC to maintain global financial leadership. He has previously stated that CBDCs are more suited for countries lacking strong investment markets.
President Trump’s executive order in January barred federal agencies from pursuing CBDC projects. The order marked a clear policy shift, reflecting a broader skepticism toward central bank-issued digital assets. Trump and Bessent appear unified in resisting any digital currency issued by the Fed.
Bessent Says CBDCs Show Economic Doubt
Bessent highlighted that nations with limited investment alternatives often pursue CBDCs to strengthen monetary control. He pointed to China as an example of this approach, but stressed the US should not follow that path. He maintained that such actions reflect a lack of confidence in traditional financial tools.
BESSENT: WOULD NOT BE IN FAVOR OF FED ISSUING DIGITAL CURRENCY https://t.co/oBHrkgj8Hd
— *Walter Bloomberg (@DeItaone) May 6, 2025
He also indicated that digital innovation should come from private enterprises, not centralized federal systems. Bessent warned that centralizing digital currency operations would reduce market competition and hinder financial freedom. He emphasized that private innovation ensures resilience and economic strength.
So far, the Federal Reserve has not announced any concrete plans to launch a CBDC. Instead, Fed Chair Jerome Powell has focused on regulating existing digital assets, especially stablecoins. Bessent has argued that regulation should remain the government’s priority, not issuance.
Senate Prepares Vote on Stablecoin Bill
Congress continues to work on regulatory clarity through a proposed stablecoin bill. The Senate plans to vote before May 26, potentially introducing the first major crypto regulation in the country. The House remains divided, with ongoing debates in committee hearings.
Representative Maxine Waters remains one of the key figures opposing parts of the bill in the House. Her objections have delayed consensus, but negotiations are ongoing. The outcome of this bill could shape the future regulatory framework for digital currencies in the US.
Meanwhile, the Treasury has yet to release its report on the proposed US Strategic Bitcoin Reserve. The report will include a plan for managing Bitcoin assets seized by the government. Bessent is expected to present the framework outlining the reserve’s structure and strategy.
