United States House Financial Services Committee has set its sights on preventing the issuance of a central bank digital currency (CBDC). Chairman Patrick McHenry announced that on September 20, the committee will mark up two bills crucial to shaping the future of digital currency in the nation.
The first of these bills, known as the “Digital Dollar Pilot Prevention Act” or H.R. 3712, aims to ensure that the Federal Reserve cannot initiate pilot programs for testing CBDCs without prior approval from Congress. Representative Alex Mooney introduced this legislation back in May. This comes in response to growing concerns about the rapid advancement of CBDC projects, even though the Federal Reserve recently emphasized its intention to proceed with a CBDC only under an authorizing law.
“The Federal Reserve of San Francisco’s recruitment drive for technical positions in its CBDC project has sent a clear signal that the digital dollar remains a topic of discussion,” noted experts.
The second piece of legislation proposes an amendment to the Federal Reserve Act, with provisions that would prohibit Federal Reserve banks from directly offering certain products or services to individuals. Moreover, it would explicitly restrict the use of CBDCs for monetary policy purposes and more.
According to the bill, “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.”
The contentious debate surrounding the prospect of a digital dollar continues to divide opinions across the nation. High-profile figures such as presidential candidates Robert F. Kennedy Jr. and Ron DeSantis have voiced their concerns, citing worries about financial privacy.
On the flip side, proponents of CBDCs argue that embracing digital currency could help the United States maintain the global relevance of the dollar and potentially bolster the adoption of cryptocurrencies nationwide.
The future of the digital dollar in the United States is in jeopardy as the House Financial Services Committee pushes forward with these bills. The argument over this crucial topic is expected to continue at the center of financial and technical discussions, with implications for how the country’s monetary system will develop in the future.