U.S. Treasury Secretary Nominee Opposes Central Bank Digital Currency
Nomination Hearing Highlights
U.S. senators questioning President-elect Donald Trump’s nominee for Treasury Secretary, Scott Bessent, didn’t spend much time on cryptocurrency issues during his nomination hearing on Thursday. However, he had a chance to register strong opposition to a U.S. central bank digital currency (CBDC) and to note that he favors a modern outlook on crypto.
Bessent’s Stance on CBDC
The billionaire hedge fund manager told the Senate Finance Committee that the Federal Reserve shouldn’t issue a digital dollar – a controversial idea that’s widely seen by the crypto industry as a governmental incursion on its turf.
“I see no reason for the U.S. to have a central bank digital currency,” he said. “In my mind, a central bank digital currency is for countries who have no other investment alternatives.”
Global Perspective
Dozens of countries around the world, notably China, have launched or piloted CBDCs. However, Bessent believes they have generally pursued them out of necessity, and that the U.S. has no need.
Financial Crimes and Terrorist Financing
At another point in Thursday’s hearing, he was asked about the department’s financial-crimes arm, and in the context of terrorist financing, he said, “I believe we have to have a 2025 approach to … digital currencies.”
Crypto Industry Reaction
The sentiment was immediately embraced by the crypto-backed Ceder Innovation Foundation in a social-media post, saying, “Too many politicians have been working with a 20th century outlook which not only hurts digital innovators, but also global security.”
Bessent’s Pro-Crypto Rhetoric
Bessent, who made his fortune in hedge funds, shed hundreds of thousands of dollars in a bitcoin exchange-traded fund investment after accepting Trump’s nomination, demonstrating he’s had skin-in-the-game to back up his pro-crypto rhetoric.
“Crypto is about freedom and the crypto economy is here to stay,” he said in an interview with Fox Business in July.
Conclusion
In conclusion, Scott Bessent’s nomination hearing highlighted his opposition to a U.S. central bank digital currency and his support for a modern outlook on crypto. His comments reflect a growing trend among policymakers to recognize the importance of digital currencies and the need for a forward-thinking approach to financial regulation.
FAQs
Q: What is a central bank digital currency (CBDC)?
A: A CBDC is a digital or virtual currency issued by a central bank, similar to physical currency but existing only in electronic form.
Q: Why is the crypto industry opposed to CBDCs?
A: The crypto industry sees CBDCs as a governmental incursion on its turf, potentially limiting the growth and innovation of digital currencies.
Q: What is the current state of CBDCs globally?
A: Dozens of countries have launched or piloted CBDCs, with China being a notable example. However, the U.S. has not yet pursued a CBDC.
Q: What is Scott Bessent’s stance on crypto?
A: Bessent has expressed support for crypto, stating that it’s about freedom and the crypto economy is here to stay. He has also shed hundreds of thousands of dollars in a bitcoin exchange-traded fund investment after accepting Trump’s nomination.
