Chair Powell: 'Digital Dollars Won't Be Anonymous'

Jerome Powell, Fed Chairman, has stated that the central bank digital currency (CBDC) will not be anonymous, thus removing one of cryptocurrency's main advantages.

Powell said there are four minimum CBDC characteristics if the Fed pursues such an option. There would be intermediaries instead of peer-to-peer networks like Bitcoin. Secondly, privacy protections would need to be in place. Additionally, CBDC would be "transferrable or interoperable" according to the fourth characteristic - identity verification, which means the digital dollar wouldn't be anonymous.

“We would be looking to balance privacy protection with identity verification, which has to be done, of course, in today’s traditional banking system as well,” Powell said during an appearance at a Banque de France event on Sept. 27.

Digital currencies' anonymity was echoed by the European Central Bank (ECB).

28 September 2022