US House of Representatives Advances Bill to Block CBDC
A bill aimed at preventing the launch of a US central bank digital currency (CBDC) has moved forward in the US House of Representatives after receiving approval from the house committee. Spearheaded by Republicans, the bill seeks to require explicit authorization from Congress for any future US CBDC. It also aims to protect the privacy of American citizens and safeguard the country’s financial system from perceived risks associated with a CBDC. Lawmakers discussed concerns about a digital dollar during the committee hearing.
Proposed Bill Seeks to Prohibit CBDC Trials
The proposed legislation takes a preemptive approach by seeking to ban any CBDC pilot programs before they are even proposed. It would also prohibit the Federal Reserve from issuing a retail digital currency to prevent potential citizen surveillance. The bill emphasizes that any advancements in a government-backed digital token must be authorized by Congress. While progress has been made in the House, its future in the Senate remains uncertain.
Democrats Oppose Anti-CBDC Bill
The bill faced opposition from Democrats, including Rep. Maxine Waters, who expressed concerns about its impact on US global competitiveness. Waters argued that it could hinder innovation and progress in faster, more cost-effective, and simpler payments, especially when compared to countries like China that are rapidly developing their own CBDCs. The Federal Reserve’s Vice Chairman for Supervision, Michael Barr, stated that the central bank would not proceed with a CBDC without clear direction from the White House and specific authorization through congressional legislation.
Hot Take: Uncertain Future for CBDC Legislation
While there is progress on CBDC legislation in the House of Representatives, its prospects in the Democrat-dominated Senate are less promising. Republican-led bills related to cryptocurrency may find approval in the House, but they face challenges in the Senate. Currently, numerous countries, including China, are actively considering or have successfully implemented CBDCs, while the US is still in the early stages of researching the implications of a digital token. The future of a US CBDC remains uncertain.
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