U.S. Treasury Secretary Scott Bessent stated that he does not support the launch of a digital dollar. In his opinion, central bank digital currency (CBDC) is a sign of weakness.
During a meeting in Congress, Bessent stated that digital assets belong to the private sector, so the U.S. does not need a digital dollar to manage the reserves of foreign banks. Treasury bonds sufficiently support the U.S. dollar, which holds dominant positions in global trade.
"If a reserve manager or a foreign central bank holds U.S. dollars, there is a wide range of American assets they can invest in. Central bank digital currency is only needed for ease of use when there is no choice of underlying assets," Bessent reasoned.
Similar statements were made by Bessent back in January, before his confirmation as the U.S. Secretary of the Treasury. At that time, he said that he saw no reason for the issuance of a digital dollar. A few days after the inauguration, Trump signed an executive order prohibiting the creation, issuance, circulation, and use of CBDC in the U.S. In February, the Chairman of the Federal Reserve System (Fed) Jerome Powell confirmed that the regulator would not launch its own digital currency.
However, recently political analyst Nicholas Anthony from the Cato Institute expressed concerns that this executive order may not be permanent. With a new administration, everything could change, especially if a recession occurs. Then politicians may start implementing various financial instruments, even if it could violate user privacy, the analyst suggested.
Earlier, Federal Reserve Board member Lael Brainard stated that the United States needs a digital dollar so that the country does not fall behind other states issuing their own digital currencies.
