U.S. lawmakers make case for a digital dollar

Connecticut Rep. Jim Himes released a proposal to open up a conversation about a possible U.S. central bank digital currency, or CBDC.

In a white paper released Wednesday, Himes urge Congress begins exploring the launch of a digital dollar issued by the Federal Reserve prevent Governments lag behind in financial technology innovation. According to U.S. lawmakers, CBDCs “should not be seen as a replacement for traditional payment systems and currencies, but as an alternative for consumers and businesses.”

The white paper lays out a proposal in which a CBDC could raise concerns about transparency, security and privacy compared to fiat currencies. Himes added that any CBDC regulatory framework enacted by Congress should include a “robust user identification process requiring intermediaries to prove the identity of wallet holders,” with guidance developed by the Federal Reserve and “participating commercial entities.”

“The longer the U.S. government waits to embrace this innovation, the more we fall behind foreign governments and the private sector,” Hims said. “Now is the time for Congress to consider and move forward with legislation authorizing a U.S. CBDC.”

Source: CBDC white paper, on behalf of Jim Himes.

Different agencies and departments within the U.S. government have explored the impact a digital dollar could have when officials decide to launch a digital dollar. In May, the Fed published a report It concluded that “the implementation of monetary policy for retail CBDCs is highly dependent on the initial conditions of the Federal Reserve’s balance sheet.”

related: Democrats’ Divide Over Crypto Isn’t All Bad News for Regulation

Among U.S. lawmakers, Hims often push for congressional action about cryptocurrencies—especially about the technology used to examine Russia’s potential to evade sanctions—and introduced part of the bill Criticized by many for giving the finance minister unrestricted powers certain crypto transactions. Minnesota Representative Tom Emer also A bill was introduced in January The aim is to prevent the Federal Reserve from acting as a retail bank in the event of a possible issuance of a digital dollar, a sign that lawmakers have not yet reached a consensus on a U.S. CBDC.