- Scott Bessent believes a CBDC is only for countries that have no other investment alternatives
- He adds that many countries are only issuing CBDCs “out of necessity”
Scott Bessent, President-elect Donald Trump’s pick for US Treasury Secretary, has said he sees “no reason” for the US to have a central bank digital currency (CBDC).
Bessent was speaking during his nomination hearing in front of the Senate Finance Committee on January 16. The hedge fund manager was responding to questions from Republican Senator Marsha Blackburn about how he would approach discussions regarding a US CBDC.
Answering, Bessent said: “I see no reason for the US to have a central bank digital currency. In my mind, a central bank digital currency is for countries that have no other investment alternatives,” adding that “many of these countries are doing it out of necessity, whereas the US, if you hold US dollars, you can hold a variety of very secure assets.”
Exploring CBDCs
Many countries are already exploring the potential of CBDCs. For instance, in 2022, Brazil’s central bank announced it was launching its CBDC, Drex at the end of 2024.
In August 2023, Russia rolled out the first CBDC pilot, involving 13 banks. A report, at the time, noted that the country’s CBDC would begin to be operational in 2025.
To date, only three countries have launched CBDCs: the Bahamas, Jamaica, and Nigeria.
The US, however, has been hesitant to issue its digital currency. Yet, even though research has gone into the viability of one in the US, Jerome Powell, chair of the US Federal Reserve, stated in 2021 that the department wasn’t planning on launching a CBDC anytime soon.
Powell added that it would be “years rather than months” for the US to develop a digital currency and that they would look at it “very, very carefully.”
Despite this, President Biden signed an executive order, in 2022, actively calling for policies on Bitcoin and other cryptocurrencies, and urgent action in researching and developing a CBDC in the US.
