U.S. House of Representatives: Ban on government digital currency – why?

United States House of Representatives Opposes Government-Backed Digital Currency Emission

The United States House of Representatives has recently made an important decision regarding the regulation of national digital currencies, also known as CBDCs. On May 23, in a vote, members of the House supported the Republican-backed CBDC Anti-Surveillance State Act, banning the Federal Reserve from developing or launching a government-backed digital currency tied to the dollar.

Republicans’ Arguments Concerning Monetary Privacy

The Republicans, led by Tom Emmer, highlighted the risks associated with introducing a central bank digital currency, arguing that it could violate Americans’ monetary privacy. CBDC is a form of national currency regulated by a central bank of a given country that may be intended for retail or wholesale transactions.

Support for Bans on CBDC Pilots and Research Programs

Under the CBDC Anti-Surveillance State Act, a ban on conducting pilots and research programs related to national digital currency by the Federal Reserve was also proposed. The Republican Party emphasized that the earlier “Project Hamilton” was a blatant circumvention of legislative oversight.

Bipartisan Support for Frameworks on Digital Currency

Republicans and Democrats agreed that it is necessary to establish precise frameworks for the potential introduction of a national digital currency. The CBDC Anti-Surveillance State Act received bipartisan support, aiming to ensure that the development of digital money reflects the values of privacy, individual sovereignty, and free market competitiveness.

Regulations on Cryptocurrencies

Furthermore, the United States House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21 Act), which specifies the joint oversight of cryptocurrencies between the Commodity Futures Trading Commission (CFTC) and the SEC. The CFTC regulates digital commodity markets, including cryptocurrencies.

Summary

Both legislative projects, the CBDC Anti-Surveillance State Act and the FIT21 Act, aim to regulate and oversee the market of digital currencies and cryptocurrencies. It appears that discussions on financial regulations and the development of new technologies will continue to yield new legislative initiatives that will significantly impact the future of the United States financial system.