The United States House Financial Services Committee is advancing legislation of the Digital Dollar Pilot Prevention Act aiming to restrict the Federal Reserve from CBDC pilot programs without
- The United States House Financial Services Committee has scheduled a markup session for two bills concerning the digital dollar.
- The proposed legislation includes the “Digital Dollar Pilot Prevention Act” and an amendment to the Federal Reserve Act.
- The outcomes could set the stage for the trajectory of the digital dollar and its impact on the global financial landscape.
On a quest to regulate the issuance of a digital dollar, the United States House Financial Services Committee is making significant strides. Chairman Patrick McHenry has recently announced that the Committee has scheduled a markup session for two essential bills related to the potential digital dollar.
#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
Digital Dollar Prevention Act
At the core of the legislative considerations is the Digital Dollar Pilot Prevention Act, designated as H.R. 3712. Introduced by Representative Alex Mooney in May, this legislation aims to restrict the Federal Reserve from launching pilot programs for Central Bank Digital Currencies (CBDCs) without prior approval from Congress.
This comes as a response to the Federal Reserve’s cautious stance, where they have indicated their readiness to move forward with a CBDC issuance only under the framework of an authorizing law. Nevertheless, the Federal Reserve of San Francisco has been actively recruiting technical experts for a CBDC project, suggesting that the digital dollar remains a topic of serious consideration.
The second crucial piece of legislation involves an amendment to the Federal Reserve Act. This amendment would prohibit Federal Reserve banks from offering specific products or services directly to individuals. It also includes provisions that limit the use of CBDCs for monetary policy purposes and other unspecified objectives. The proposed amendment explicitly states that “A Federal Reserve bank shall not offer a central bank digital currency, or any digital asset that is substantially similar under any other name or label, indirectly to an individual through a financial institution or other intermediary.”
Debate Among Presidential Candidates
The potential implementation of a digital dollar has sparked a range of opinions within the United States. Some presidential candidates, such as Robert F. Kennedy Jr. and Ron DeSantis, have publicly expressed concerns about the establishment of a CBDC. They cite apprehensions regarding financial privacy as their main reason for opposition.
On the other hand, proponents of CBDCs argue that they could enhance the position of the US dollar on the global stage and further promote the adoption of cryptocurrencies. Currently, more than 100 countries are actively working on CBDC projects in various capacities. China has already successfully piloted its digital yuan in many cities.
To Sum it All Up….
As the United States House Financial Services Committee moves forward with the legislative measures, the fate of the digital dollar hangs in the balance. The outcome of the markup session will play a crucial role in determining the trajectory of the digital dollar in the United States and its potential impact on the global financial landscape.
