United States Secretary of the Treasury Steven Mnuchin said that he and Federal Reserve Chairman Jerome Powell do not anticipate the development of a national digital currency in the country.

Mnuchin delivered his comments during a House Financial Services Committee hearing in Washington, Bloomberg reported on Dec. 5. “Chair Powell and I have discussed this — we both agree that in the near future, in the next five years, we see no need for the Fed to issue a digital currency,” Mnuchin said.

The Treasury secretary’s statement came in response to a question about Facebook’s yet-to-be-released Libra stablecoin. Mnuchin further said that he has no objection to Libra, as long as it is fully compliant with bank secrecy and Anti-Money Laundering regulations, so that “In no way can this be used for terrorist financing.”

Regulators' critical stance towards crypto

The Federal Reserve sent a letter to U.S. Representatives French Hill and Bill Fosters in mid-November, in which the agency revealed that it is not currently developing a central bank digital currency (CBDC), but it has assessed and continues to evaluate the costs and benefits of such an initiative.

Powell said in the letter that, prior to issuing a CBDC, the Federal Reserve has to address a number of legal questions, including monetary and payments policies, financial stability, supervision and operational issues, and their vulnerability to cyber-attacks.

On Dec. 4, a panel of senior financial regulators in the United States headed by Mnuchin warned the public about the purported risks of stablecoins and cryptocurrencies. The regulators stated: