Jerome Powell, 16th Chair of Federal Reserve, believes that a digital dollar is developed with a motive to provide users with more privacy than the People’s Bank of China’s (PBOC) planned digital yuan. The U.S. Federal Reserve and People’s Bank of China agreed that designing its digital currency to be fully anonymous isn’t “feasible.” Jerome Powell Believes full Anonymity of Digital Dollar isn’t Feasible According to Jerome Powell, “The lack of privacy in the Chinese system is just not something we could do here.” The statement was made while testifying before the House Committee on Financial Services on Tuesday. “We’re only beginning to think carefully about these things and it’s going to be a careful, detailed, and probably lengthy process of consideration,” he added. Powell’s comments came after the claims of Changchun Mu, the head of PBOC’s digital currency arm, which reads that the digital yuan will offer greater privacy protection than any other digital payment system. Digital Yuan will Provide Greater Privacy Protection From the Chinese official end, the digital yuan will have “controllable anonymity,” in which the most private account would only require a cell phone number. However, Fed has not specified how much anonymity any digital dollar would allow users to have, in part because there is no concrete timetable for a digital dollar. In coming July this year, there will be detailed research on the proposed stablecoins. Fed officials have not disclosed whether the central bank would host customer accounts or enlist a trusted third party. Also, it is yet to discuss what privacy protections users would have in case of a breach. Although, it is clear that people need to register for their phone numbers with a phone service carrier with their ID. Users are also asked to disclose their more personal information if their deposit amount hits a certain threshold.
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