CBDC Takes Center Stage in US Politics
In the past few weeks, several high-ranking officials in the United States have expressed their views regarding CBDC. While some remain impartial, others are vehemently opposed to the concept of a central bank digital currency.
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Tom Emmer, a Republican congressman who positions himself as a defender of cryptocurrencies and opponent of CBDC, is one such individual. In his speech at a conference hosted by the Cato Institute, he once again warned the Federal Reserve about the drawbacks of the potential issuance of a digital dollar. This is because he believes that this technology does not align with American values such as privacy and free markets.
According to Emmer, the government strives to gain more control over people's finances through CBDC. He also took the opportunity to remind everyone about his bill that prohibits the Federal Reserve from issuing CBDC for individuals. This is despite the organization's repeated statements that such action would require congressional approval.
While the federal government seeks to maintain and expand the financial control to which it has grown accustomed, the idea of a central bank digital currency has gained traction within the institutions of power. I'm confident that American values will always prevail against the power-hungry whims of unelected bureaucrats
said Congressman Tom Emmer.
Many countries have been testing or developing CBDC for some time. American politicians and bureaucrats are exploiting the situation to speculate that the US is falling behind and that CBDC will help maintain the dollar's leading position in the world. Emmer is against this emphasis upon exigency.
The Fed
Michael Barr, the Vice Chair for Supervision at the Federal Reserve, takes a neutral stance on CBDC in contrast to Emmer. He confirmed that the Federal Reserve is focused on researching the technology and is aware of all the potential privacy issues. However, many central banks are already hunting for top-notch developers.
We haven’t made a decision yet, and we think there’s a lot of work yet to be done before we can make any decision. We would only proceed with this if we thought it was the right idea for the country as a whole
– © Michael Barr, Vice Chair for Supervision at the Federal Reserve.
Michael also mentioned stablecoins, stating that they need federal regulation. For those who do not want to have their financial information shared with the government, they might be a viable alternative to CBDC. During his testimony to Congress, Federal Reserve Chairman Powell commented on the digital dollar. When asked about the impact of CBDCs on stablecoins, he refrained from giving a direct answer, stating that their reserves remain opaque without appropriate regulation.
Department of the Treasury
Nellie Liang, the Under Secretary for Domestic Finance at the U.S. Treasury Department, has announced that a working group composed of experts from various government agencies will begin discussing the potential launch of a CBDC in early March. The group will assess the benefits of such a currency for US financial leadership and national security. It will also ensure compliance with all relevant laws at both the domestic and global levels.
Liang also gave her support to politicians who believe CBDCs could damage the traditional banking system:
Retail CBDCs also have risks, including the potential for a run to the CBDC in times of stress that could destabilize private sector credit intermediation
Nellie Liang, the Under Secretary for Domestic Finance at the U.S. Treasury Department, has announced that a working group composed of experts from various government agencies will begin discussing the potential launch of a CBDC in early March. The group will assess the benefits of such a currency for US financial leadership and national security. It will also ensure compliance with all relevant laws at both the domestic and global levels.
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