US legislators continue to search for ways to block the development of digital dollar.
The US House Financial Services Committee is progressing on two legislative fronts, halting the creation of a central bank digital currency (CBDC) in the United States.
Committee Chairman Patrick McHenry announced that detailed discussions delving into the particulars of these bills, known as markups, are scheduled for September 20th.
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The first of the discussed legislative bills will be the Digital Dollar Pilot Prevention Act (HR 3712). Introduced by Representative Alex Mooney earlier this year, this bill aims to restrict the Federal Reserve from launching pilot programs to test CBDCs without congressional approval.
While the Federal Reserve has stated that any issuance of a CBDC would require an authorizing law, the San Francisco branch of the Federal Reserve has recently been looking to hire technical experts for a potential CBDC project, hinting that the idea remains a possibility.
The second bill involves an amendment to the existing Federal Reserve Act. The proposed amendment aims to prevent Federal Reserve banks from providing specific financial products or services directly to individuals. It also restricts the use of CBDCs for monetary policy purposes. In particular, the bill states:
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.
Public figures such as presidential candidates Robert F. Kennedy Jr. and Ron DeSantis have opposed the launch of US CBDC, primarily citing concerns over financial privacy. On the flip side, proponents argue that a digital dollar could enhance the US dollar's global standing and expedite the adoption of other cryptocurrencies.
The US House Financial Services Committee is taking active steps to prevent the issuance of a digital dollar, a move that aligns with a wave of public debate on the matter. With the markup sessions scheduled for September 20th, the coming weeks could be crucial in determining the future of a US CBDC.
