Trump's Treasury pick Scott Bessent says he sees 'no reason' for a US CBDC

President-elect Donald Trump's pick for Treasury Secretary Scott Bessent says he sees "no reason" for the U.S. to have a central bank digital currency.

During his nomination hearing on Thursday before the Senate Finance Committee, the hedge fund manager was asked how he would approach discussions surrounding CBDCs. A CBDC is a digital form of fiat money, directly issued and regulated by the central bank of a country.

"I see no reason for the U.S. to have a central bank digital currency," Bessent said. "In my mind, a central bank digital currency is for countries who have no other investment alternatives."

The Federal Reserve has been exploring the possibility of issuing a CBDC and released a report in 2022 examining the pros and cons of a CBDC, but central bank officials have thrown cold water on the idea in the past. Fed Chair Jerome Powell has also said the Fed won't issue a CBDC without congressional approval. Current Treasury Secretary Janet Yellen has encouraged research to figure out o pportunities and challenges for a CBDC and has signaled a cautious approach.

Some Republican lawmakers have been staunchly opposed to a CBDC and say a CBDC could open the door to government surveillance of peoples' transactions. So far 134 countries, representing 98% of global GDP, are exploring a CBDC in some way, according to the Atlantic Council ; That figure includes the United States.

Bessent, tapped by Trump in late November, has spoken positively about crypto. Bessent told Fox Business in July he was "excited about the president's embrace of crypto."

Crypto-advocacy group the Cedar Innovation Foundation supported Bessent's nomination.

"Scott Bessent is an exceptionally qualified leader ready to implement the pro-crypto mandate voters delivered last November," Colin McLaren, CIF's engagement director, said in a statement on Wednesday. "As Secretary of the Treasury, he will play a critical role in shaping and implementing a regulatory framework for crypto that will lay the foundation for American leadership, innovation and growth."