A bill aimed at thwarting the potential launch of a US central bank digital currency (CBDC) has advanced to the floor of the US House of Representatives following approval by the House Financial Services Committee on Wednesday.
Led by Republican members of the committee, the bill has drawn attention due to its goal of requiring explicit authorization from Congress for any future US CBDC. It also aims to protect the privacy of American citizens and guard against perceived risks associated with a CBDC.
During discussions on Wednesday, House lawmakers debated the idea of a digital dollar’s creation.
The proposed legislation takes a proactive stance by seeking to prohibit CBDC pilot programs before they are even proposed. Additionally, it would prevent the Federal Reserve from issuing a retail digital currency, seen as a safeguard against potential citizen surveillance. The bill insists that any progress in a government-backed digital token must be explicitly authorized by Congress.
While the bill’s progress in the House is a significant milestone, its fate in the Senate remains uncertain. The Senate Banking Committee, led by Sen. Sherrod Brown (D-Ohio), doesn’t share the same enthusiasm for digital assets as their Republican counterparts.
Notably, the bill faced opposition from the committee’s top Democrat, Rep. Maxine Waters (D-Calif.), similar to previous legislation addressing stablecoins and crypto market structure. Waters expressed concerns that the bill could undermine the United States’ global competitiveness, particularly in comparison to countries like China, which are rapidly advancing in CBDC development. She argued that the legislation might stifle innovation and hinder progress in achieving faster, more cost-effective, and simpler payments.
Despite claims by Republicans that the Biden administration supports a CBDC, federal agencies are still in the early stages of conducting basic research on the implications of a US digital token.
While cryptocurrency bills led by Republicans might find approval within the House, their prospects in the Democrat-dominated Senate appear less promising. Currently, 130 countries are actively considering digital versions of their currencies, and several, including China, have already successfully implemented CBDCs.
By FCCT Editorial Team
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