Digital Dollar Debate Heats Up In US Congress
US Congress is set to deliberate on two significant bills that could define the future of central bank digital currencies (CBDCs) in America.
Patrick McHenry, a prominent Congressman from North Carolina, recently announced that the US House Financial Services Committee will convene on September 20 to critically analyze two bills that could determine the fate of CBDCs in the US.
On the table for discussion are:
- The "Digital Dollar Pilot Prevention Act" (H.R. 3712): This legislation suggests a need for checks and balances, calling for Congress's approval before the Federal Reserve embarks on any CBDC pilot programs. This proposal originated from Representative Alex Mooney earlier this year.
- The "CBDC Anti-Surveillance State Act" (H.R. 5403): Advocating for the rights and privacy of the common citizen, this bill put forward by Tom Emmer, a pivotal figure in the House, seeks to restrict Federal Reserve banks from delivering direct CBDC-related offerings to individuals.
The debate around CBDCs in America is far from settled. Advocates champion the potential of a digital dollar in enhancing the resilience of the banking infrastructure. Detractors, however, raise alarms over potential infringements on the financial privacy of Americans, many of whom remain skeptical of the technology, and the price of its touted benefits.
Although the US Federal Reserve hasn't officially announced plans for a CBDC, they are clearly actively exploring the technology. For instance, they have engaged with the Federal Reserve Bank of Boston in projects like PArSEC, a sandbox for CBDC experimentation. Additionally, the New York Innovation Center has explored how CBDCs might function seamlessly alongside commercial digital assets.
The forthcoming Congressional discussion promises to be a pivotal moment in shaping the future of digital currencies in the United States.
FedNow: A Sign Of Things To Come?
Additionally, in July the Federal Reserve launched FedNow, its new fast payments system. This was an update to the payment rails, rather than a CBDC (infrastructure plus currency): An upgrade to the country's "financial plumbing" that allows existing money to flow more quickly and cheaply.
However, the nature of FedNow means that it centralizes power with the Federal Reserve, giving the Fed a increased control of the payments system. It's not a CBDC, but it's one step closer to the dystopian prospect of access to payments services being used as a means of population control.
Subscribe to our newsletter and follow us on Twitter.