Connecticut House of Representatives member Jim Himes has posted a proposal aimed at starting a dialogue that the United States could launch a central bank digital currency, or CBDC.
In a white paper released Wednesday, Himes urged Congress will begin exploring the possibility of issuing a digital dollar issued by the Federal Reserve for prevent the government from lagging behind in innovation in financial technology. According to the US lawmaker, CBDC “should not be seen as a replacement for legacy payment systems and currencies, but as an additional alternative for consumers and businesses.”
The white paper outlines a proposal where the CBDC can raise concerns about transparency, security, and privacy compared to fiat currency. Hymes added that any CBDC regulatory framework passed by Congress must include “strong user identification processes that require intermediaries to verify the identity of wallet holders” and the Federal Reserve and “participating commercial entities” must develop guidelines.
“The longer the United States government waits to embrace this innovation, the further we fall behind both foreign governments and the private sector,” Himes said. “It’s time for Congress to consider and pass legislation to allow the creation of a CBDC in the US.”
Various agencies and departments in the US government have looked into the possible implications of the digital dollar should officials decide to launch it. In May, the Fed released a report concluding that “the implementation of retail CBDC monetary policy is highly dependent on the initial conditions of the Federal Reserve’s balance sheet.”
Democrats Divided Over Cryptocurrency Not All Bad News for Regulation
Among lawmakers in the United States, Hymes has often pushed for Congressional action on cryptocurrencies — especially on technology being used for Russia that could potentially evade sanctions — and introduced a section of the bill that many have criticized for giving the Treasury Secretary unlimited power over some crypto transactions. Minnesota Representative Tom Emmer also introduced a bill in January aimed at preventing the Fed from acting as a retail bank in a potential digital dollar issuance, suggesting that lawmakers have not yet reached a consensus on a US CBDC.
Credit : cointelegraph.com