Fed Chairman Confirms That A U.S. CBDC Would “Not Be Anonymous”

And this is why I say “Bitcoin Is Best”. We all are aware nothing good is to come out of the Fed and Jerome Powell confirms that for those in the nosebleeds.


Federal Reserve Chairman Jerome Powell said that a central bank digital currency (CBDC) in the U.S. would “not be anonymous” during an event hosted by the Bank of France on Tuesday.

He described the key properties that would underpin a CBDC if implemented – one of which includes being “identity verified.”

Private, But Not Anonymous
The chairman’s comments were in response to an audience question about the anonymity of many cryptocurrencies, and whether CBDCs would mimic this property.

While the Fed is yet to make any decisions on whether to proceed with a CBDC, it has been actively discussing what one might look like, and its potential risks and benefits.

Powell said that a CBDC would be guaranteed to have four characteristics: Intermediation, privacy protection, interoperability, and identity verification.

“It would not be anonymous,” he clarified. “It would not be an anonymous bearer instrument.”

Powell added that this would require finding a “balance” between privacy protection and identity verification, which is already done in today’s traditional banking system.

“Privacy” refers to the ability to have others unable to observe one’s actions. By contrast, anonymity means one’s actions are observable, but nobody knows who is behind them.

In some ways, cryptocurrencies like Bitcoin can be considered “anonymous” because the protocol does not collect identifying information from users interacting with the network. However, it lacks privacy because its ledger of transactions is publicly transparent.

Powell said that the Fed will nevertheless need approval from congress if it ever seeks to roll out a CBDC. Numerous congressional Republicans including Tom Emmer and Ted Cruz have signaled opposition to its issuance.

Master Asked on September 27, 2022 in Cryptocurrency.
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