House Financial Services Committee Advances Legislation to Prevent Central Bank Digital Currency
Summary:
The US House Financial Services Committee is progressing with legislation to prevent the issuance of a central bank digital currency (CBDC). The proposed bills include the Digital Dollar Pilot Prevention Act and an amendment to the Federal Reserve Act. They aim to restrict the Federal Reserve from conducting pilot programs for CBDCs without approval from Congress and prohibit direct offerings of certain products or services by Fed banks to individuals. Critics raise concerns about financial privacy, while proponents argue for maintaining the relevance of the US dollar and promoting cryptocurrency adoption.
The House Financial Services Committee in the United States is making progress on a proposed legislation that aims to prevent the introduction of a central bank digital currency (CBDC), as stated by chairman Patrick McHenry. On September 20, the Committee will discuss two bills related to the potential digital dollar. The bills, known as the Digital Dollar Pilot Prevention Act and an amendment to the Federal Reserve Act, are crucial steps in the legislative process before they can proceed to the House floor. The Digital Dollar Pilot Prevention Act, also referred to as H.R. 3712, was introduced by Representative Alex Mooney in May, and it prohibits the Federal Reserve from conducting pilot programs for testing CBDCs without congressional approval. While the Federal Reserve has recently claimed to have no immediate plans for a CBDC, the Federal Reserve of San Francisco has been recruiting for technical positions related to a CBDC project, indicating that the idea of a digital dollar is still being considered. In addition to preventing the issuance of a CBDC, the proposed legislation also prohibits Fed banks from offering certain products or services directly to individuals and restricts the use of CBDCs for monetary policy purposes. Critics of a digital dollar, including presidential candidates Robert F. Kennedy Jr. and Ron DeSantis, have expressed concerns about financial privacy. However, proponents argue that a CBDC could help maintain the global relevance of the US dollar and encourage wider adoption of cryptocurrencies.
Published At
9/17/2023 4:41:33 PM
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