In a bold attempt to transit into the digital frontier, the U.S. House of Representatives is poised amidst questions of whether or not to introduce a Central Bank Digital Currency (CBDC), which is currently being proposed in multiple House bills. Notably, Rep. Stephen Lynch (D-Mass.), a key Democrat, is calling for a pilot project toward the execution of a digital dollar.
The idea of a digital dollar appears to be rather controversial, becoming a talking point in presidential campaigns and inspiring several legislations that seek to quash the idea even before it actualizes. However, Lynch’s proposition, which coincided with the House Financial Services Committee’s panel on digital assets, contradicts such initiatives.
In line with the global trend toward digital currencies, exemplified by ongoing digital currency projects in Russia, China, and about 130 other countries, Lynch argues that it is “absolutely critical” for the U.S. to manifest leadership in digital currency development and regulation. Should Lynch’s suggestion become successful, it might set the conditions for a trial run in the Treasury Department, in clear defiance of the restrictions posed by the Digital Dollar Pilot Prevention Act promoted by Rep. Alex Mooney (R-W.V.), another committee member.
Conceptually, a U.S. digital dollar, regulated by the Federal Reserve, would operate akin to a wholly digital equivalent to the nation’s physical currency. However, matters of transaction management, tracking, and potential limitations proposed by regulatory authorities, among other things, remain unresolved.
Notwithstanding these uncertainties, Fed Vice Chairman for Supervision Michael Barr suggests that further progress might necessitate approval from both the White House and Congress. Naturally, gaining this political backing may entail considerable challenge, given apparent Republican resistance at this stage.
Rep. Tom Emmer (R-Minn.), a well-known crypto advocate and majority whip in the House leadership, has proposed counteracting legislation that aims to abolish a retail CBDC in the U.S., underpinned by a concern that, if not open, permissionless, and private, a government-issued CBDC could become a surveillance tool, undermining the American way of life.
Despite these contentious speculations, the Biden administration has yet to propose a CBDC. Authorities from the Federal Reserve and the Treasury Department, however, have hinted at looking into the technology, in light of its rapid acceptance in countries like China. The question thus remains: will the U.S. seize this chance to leap forward into the digital currency age, or will fears and resistance dampen the momentum?
Source: Coindesk
