- The House Financial Services Committee approves a bill restricting the Federal Reserve’s advances towards a U.S. Central Bank Digital Currency (CBDC).
- The bill emphasizes citizen privacy and requires explicit congressional approval for CBDC development.
A latest report from Bitcoin Magazine has cast a spotlight on the House Financial Services Committee’s endorsement of a pivotal bill. This legislation aims to put the brakes on any efforts by the Federal Reserve to progress with the development of a U.S. CBDC.The significance of this development was also captured by crypto expert Collin Brown in a recent tweet:
🚀 Big Step in Crypto Legislation! 📜 The US Congressman's bill to block the Federal Reserve from issuing a CBDC has just cleared the Financial Services Committee. 🏦🚫
— Collin Brown (@CollinBrownXRP) September 21, 2023
Congressional Oversight on CBDC Development
Headed by Rep. Patrick McHenry (R-N.C.), the committee’s backing of the bill emphasizes the necessity for any CBDC development to gain direct approval from Congress. As U.S. Congressman Tom Emmer introduced the bill, he stated,
“This is an issue of privacy, individual sovereignty, and free market competitiveness.”
CoinDesk further detailed the progress of this crypto-related bill which is now on its way to consideration on the floor of the U.S. House of Representatives, signaling substantial advancement for digital asset legislation in Congress.
Yet, the bill has its share of opponents. Rep. Maxine Waters (D-Calif.), a leading Democrat on the panel, labeled the Republicans’ efforts as obstructing innovation. Waters warns that this could position the U.S. behind other nations, notably China, in the race to establish CBDC global standards.
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“The legislation would stifle research and keep the United States lagging behind other countries,” she emphasized.
CBDC and the Bigger Financial Picture
This endorsement from the committee comes at a time when the U.S. government faces potential shutdowns amidst debates on other major financial reforms. Despite these looming challenges, Republicans are unwavering in their approach to halt the development of a digital dollar.
The bill’s progression might encounter resistance as it advances to the Senate. The Senate Banking Committee, where Democrats hold a majority and is led by Sen. Sherrod Brown (D-Ohio), might not share the same enthusiasm as their House counterparts. The Federal Reserve, although not yet working on a CBDC, has been involved in foundational research related to it. Vice Chairman for Supervision Michael Barr emphasized that any steps towards a CBDC would need a directive from the White House and legislative approval from Congress.
As the CBDC debate intensifies, the ramifications of this bill for U.S. financial innovation and its global standing are still unfolding.