The US House Financial Services Committee Moves Forward with Legislation to Prevent Central Bank Digital Currency
The United States House Financial Services Committee is taking steps to prevent the issuance of a central bank digital currency (CBDC). Chairman Patrick McHenry announced that the committee will mark up two bills on September 20th regarding the potential for a digital dollar. One of the bills, called the Digital Dollar Pilot Prevention Act or H.R. 3712, prohibits the Federal Reserve from conducting pilot programs for CBDCs without approval from Congress. Representative Alex Mooney introduced this legislation in May.
The Federal Reserve recently stated that it would only proceed with a CBDC if authorized by law. However, the Federal Reserve of San Francisco has been seeking technical positions for a CBDC project, suggesting that the digital dollar is still being considered.
An Amendment to the Federal Reserve Act
The second bill is an amendment to the Federal Reserve Act that restricts Fed banks from offering certain products or services directly to individuals and prohibits the use of CBDCs for monetary policy. The bill states that a Federal reserve bank cannot indirectly offer a central bank digital currency or any similar digital asset to an individual through a financial institution or intermediary.
Controversy and Perspectives on CBDCs
The possibility of a digital dollar has generated controversy in the US. Presidential candidates Robert F. Kennedy Jr. and Ron DeSantis have expressed concerns about establishing a CBDC due to privacy issues. On the other hand, proponents argue that a CBDC would help maintain the global relevance of the US dollar and promote wider adoption of cryptocurrencies.
Hot Take: US House Committee Takes Steps to Prevent Central Bank Digital Currency
The US House Financial Services Committee is moving forward with legislation aimed at preventing the issuance of a central bank digital currency (CBDC). This includes a bill that prohibits the Federal Reserve from conducting pilot programs for CBDCs without approval from Congress. While the Federal Reserve has stated that it would only proceed with a CBDC if authorized by law, recent hiring activity suggests that the digital dollar is still being considered. The controversy surrounding CBDCs continues, with concerns about financial privacy raised by some and arguments in favor of maintaining the global relevance of the US dollar and promoting cryptocurrency adoption made by others.
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