The House Financial Services Committee in the United States is moving towards passing legislation that would deter the creation of a central bank digital currency, i.e., a digital dollar. The announcement was made by Chairman Patrick McHenry that the Committee will commence discussions on two bills on Sep. 20, aiming to bring a halt to the potential development of a digital currency.
The Digital Dollar Pilot Prevention Act, otherwise known as H.R. 3712, is one of these bills. It essentially attempts to prevent the Federal Reserve from launching any digital currency pilot programs without the express approval of the Congress. This legislation was introduced earlier in May by Representative Alex Mooney.
In recent news, despite previously dismissing the decision to issue a central bank digital currency (CBDC), the Federal Reserve seems to still have it on their agenda. This speculation comes in light of the Federal Reserve of San Francisco’s recent moves to recruit technology experts for potential projects related to a digital dollar.
The second bill is aimed at amending the Federal Reserve Act to prohibit Fed banks from providing certain types of services to individuals or from using CBDCs for monetary policy or other purposes. Simply put, “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,” as stated in the bill.
The concept of a digital dollar has sparked a wide array of opinions and brought about many discussions in the United States. High-profile personalities such as presidential candidates Robert F. Kennedy Jr. and Ron DeSantis have expressed their concerns over privacy issues if a CBDC were to be created. On the other hand, proponents argue that it would help in maintaining global relevancy of the dollar and expedite the adoption of cryptocurrencies overall.