A bill designed to block the potential launch of a US central bank digital currency (CBDC) has progressed to the floor of the US House of Representatives following the house committee approval on Wednesday.
The bill, spearheaded by Republicans within the House Financial Services Committee, has garnered attention for its intent to ensure that any future US CBDC receives explicit authorization from Congress.
Additionally, it seeks to safeguard the privacy of American citizens and protect the country’s financial system from the perceived risks associated with a CBDC.
House lawmakers devoted time on Wednesday to addressing concerns about the conception of a digital dollar.
Proposed Bill Aims to Block CBDC Trials
The proposed legislation takes a preemptive approach by aiming to prohibit any CBDC pilot programs before they are even proposed.
Furthermore, it would ban the Federal Reserve from issuing a retail digital currency, a move seen as a preventive measure against potential citizen surveillance.
Notably, the bill insists that any advancements in a government-backed digital token must be explicitly empowered by Congress.
While the progress made in the House on CBDC legislation marks an unprecedented milestone, its future in the Senate remains uncertain.
The Senate Banking Committee, led by Sen. Sherrod Brown (D-Ohio), does not share the same affinity for digital assets as their Republican counterparts.
Democrats Oppose Anti-CBDC Bill
Similar to previous legislation addressing stablecoins and crypto market structure, the bill faced opposition from the committee’s top Democrat, Rep. Maxine Waters (D-Calif.).
Waters expressed concern that the bill could hinder the United States’ global competitiveness, particularly in comparison to nations like China, which are advancing rapidly in the development of central bank digital currencies.
She argued that the legislation could stifle innovation and hinder progress in the realm of faster, more cost-effective, and simpler payments.
The Federal Reserve’s Vice Chairman for Supervision, Michael Barr, emphasized earlier this month that the central bank would not proceed with a CBDC without clear direction from the White House and specific authorization through congressional legislation.
Despite claims by Republicans that the Biden administration supports a CBDC, federal agencies are currently in the initial stages of basic research on the implications of a US digital token.
While Republican-led cryptocurrency bills may find approval within the House, their prospects in the Democrat-dominated Senate appear less promising.
Currently, 130 countries are actively considering the development of digital versions of their currencies, while several nations, including China, have successfully implemented CBDCs.
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