Republicans advance a bill in the US House of Representatives to prevent CBDC development without explicit congressional authorization, amid concerns of privacy and potential surveillance.
- A Republican-led bill seeks to prevent the launch of a US CBDC without explicit Congressional authorization.
- The bill aims to protect citizens’ privacy and the US financial system.
- Despite its progress in the House, the bill faces challenges in the Democrat-dominated Senate.
A bill aimed at preventing the launch of a US central bank digital currency (CBDC) has advanced to the floor of the US House of Representatives after receiving approval from the house committee on Wednesday. Spearheaded by Republicans in the House Financial Services Committee, the bill seeks to ensure that any future US CBDC is explicitly authorized by Congress. It also aims to protect the privacy of American citizens and safeguard the country’s financial system from perceived risks associated with a CBDC.
#NEW: Chairman @PatrickMcHenry announces a markup of legislation to strengthen American national security and prevent the issuance of a central bank digital currency.
📖 Read more 🔗https://t.co/oy3oASJYkA
— Financial Services GOP (@FinancialCmte) September 16, 2023
Concerns Addressed in House Discussion
During discussions on Wednesday, House lawmakers focused on addressing concerns related to the introduction of a digital dollar. The proposed legislation takes a preemptive approach by seeking to ban any CBDC pilot programs before they are even proposed. It also prohibits the Federal Reserve from issuing a retail digital currency as a precautionary measure against potential citizen surveillance. Additionally, the bill emphasizes that any progress in the development of a government-backed digital token must be explicitly authorized by Congress.
Democratic Opposition to Anti-CBDC Legislation
However, the bill faces opposition from Democrats, including the committee’s top Democrat, Rep. Maxine Waters. She expressed concerns that the legislation could hinder the United States’ global competitiveness, especially in comparison to nations like China, which are rapidly advancing in CBDC development. Waters argued that the bill could stifle innovation and impede progress in faster, more cost-effective, and simpler payments.
The Federal Reserve’s Vice Chairman for Supervision, Michael Barr, previously stated that the central bank would not proceed with a CBDC without clear direction from the White House and specific authorization through congressional legislation. While Republicans claim that the Biden administration supports a CBDC, federal agencies are currently in the initial stages of basic research on the implications of a US digital token.
To Sum it All Up….
While the progress made in the House on CBDC legislation is a significant milestone, its future in the Senate remains uncertain. The Senate Banking Committee, led by Sen. Sherrod Brown, does not share the same enthusiasm for digital assets as their Republican counterparts. This suggests that Republican-led cryptocurrency bills may face challenges in the Democrat-dominated Senate.
Currently, 130 countries are actively considering the development of digital currencies, with several, including China, successfully implementing their own CBDCs.
