The Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee on Tuesday, February 11, regarding the Fed’s semi-annual monetary policy report. During the testimony, Ohio Senator Bernie Moreno asked Powell whether he could commit that the Federal Reserve would never have a central bank digital currency during his tenure.
Powell responded with a clear and bold answer, ‘Yes’. With Powell’s term as the Fed’s chair expected to end in May 2026, the speculations on whether the US would have a CBDC are completely squashed.
“Thank you for that, I think that’s extremely important. It makes me very happy to hear you say that,” Moreno said.
Top Reasons Why Trump Administration is Against a CBDC
The Trump administration gained huge popularity during the pre-2024 general elections, majorly due to its stance on digital assets. Since the inauguration earlier last month, President Trump and the US Congress have made several moves to ensure mainstream adoption of digital assets in the United States.
Meanwhile, the Trump administration has promised not to violate people’s right to freedom through the use of CBDCs. The current US lawmakers have argued that the country cannot move in the same direction as China, which has already rolled out the digital Yaun across major cities.
Already, there are concerns that the Digital Yuan has been linked to digital IDs, thus enabling the government to control people’s spending behaviors.
With the US government seeking to keep the US dollar as the global reserve currency, the Trump administration is keen to tap into the stablecoins market to push further the agenda.
The Beneficiaries
The move by the United States to end the possibilities of a central bank digital currency will heavily benefit the stablecoins industry in the coming years. The mainstream adoption of digital assets has pushed the stablecoins industry to a total valuation of over $232 billion and a 24-hour average trading volume of about $40 billion at the time of this writing.
The expected implementation of a clear regulatory framework for digital assets and stablecoins from the US Congress will further bolster the US-made stablecoins. On the top list is Circle’s USDC (💵 $1.00), which had a market cap of about $56 billion and a 24-hour average trading volume of around $4.3 billion.
Already, Circle’s USDC has been adopted by Donald Trump-backed World Liberty Financial (WLFI) and Coinbase Global Inc. (NASDAQ: COIN). As a result, USDC’s market dominance has grown gradually in recent years to about 25 percent at the time of this writing.
Meanwhile, PayPal USD (PYUSD) and Ripple USD (RLUSD) are well-positioned to gain more market ground in the near future.
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2025-02-12 07:55