Republican House Majority Whip Tom Emmer (R-MN) on Thursday warned against a central bank digital currency (CBDC), slamming the technology as an affront to American values of privacy, individual sovereignty and free markets.
The legislator’s comments came during a panel organized by the Cato Institute, a libertarian think tank headquartered in Washington DC, where he described the CBDC as a struggle for power between the US government and its population. But the Federal Reserve has said it will not issue a CBDC without written approval from Congress. Technology could foster greater financial inclusion while reducing costs for consumers, analysts have Said,
“As the federal government seeks to maintain and expand the financial controls to which it has become accustomed, the idea of a central bank digital currency has gained traction within institutions of power,” Emmer told TODAY. “I am convinced that American values will always prevail against the power-hungry craze of unelected bureaucrats.”
Their concern stems from the belief that a CBDC in the US would destroy American’s financial privacy – allowing government agencies to track individual spending – or be used to “curb politically unpopular activity”.
CBDCs are similar to stablecoins in that they are digital tokens pegged to the value of a sovereign currency such as the US dollar. However, instead of being issued by private companies on a decentralized network, CBDCs are issued and maintained by their respective governments or central banks.
countries like Japan And Australia Moving forward with technology exploration, according to the Atlantic Council, nearly 90 countries around the world are either piloting, developing or researching the technology, including the US. cbdc tracker,
Emmer warned against a “mindset that the United States has fallen behind other countries such as China,” which has rapidly rolled out its own digital version of the yuan. The country’s CBDC was reportedly integrated into popular social media and payments app WeChat this week Forecast,
Last September, a hearing took place before the US House Committee on Financial Services, where some officials Said The US should establish a CBDC to maintain the greenback’s status as the world’s reserve currency.
“Nothing could be more dangerous than following such a manufactured sense of urgency and eventually developing a CBBC,” Emmer said Thursday.
During the event, Emmer drew attention to a bill restart Last month that would limit the Fed’s ability to issue CBDCs directly to individuals, even though the central bank has repeatedly said it would need approval from Congress to do so.
“If you just want to assume that people are going to do the things you expect them to do, you do so at your peril,” he said. “They are already moving in this direction.”
Emmer has positioned himself as an outspoken advocate for the digital asset industry on Capitol Hill, calling out Securities and Exchange Commission for its “regulation through enforcement” approach and scrutinizing Treasury Department on Blacklisting of Coin Mixer Tornado Cash.
Less than a mile away from the Cato Institute, Michael Barr, the Fed’s vice chairman for supervision, spoke about CBDCs during an event hosted by the Peterson Institute for International Economics, another US think tank.
Barr said the Fed is aware of the privacy concerns that have been raised over the establishment of a CBDC, adding a CBDC in the US should have the same degree of “insulation” from government oversight that bank deposits currently have.
“there is [a] A set of questions raised by people around privacy,” he said. “How much information will the central bank or other government entities have access to?”
Barr said that although the Fed is “focusing a lot on research and development” for a potential CBDC, it is not yet certain whether the technology will be used. Still, the Federal Reserve Bank of San Francisco is actively recruiting Senior level developers.
“We haven’t made a decision about whether we think it’s a good idea,” Barr said in reference to the CBDC. “We only want to do it if there is a consensus that it was something that was good for the country.”
During testimony to Congress yesterday, Fed Chairman Jerome Powell abstinence Commenting with certainty on whether CBDCs could impact stable coins already in use, the interpretation of the lack of regulation renders the repository somewhat opaque.
Barr said stable coins warrant some form of federal oversight as private forms of money that draw on the credibility of the US
“They’re a form of private money that borrows the trust of a central bank, and I think [it’s] It’s absolutely critical that we get regulatory oversight of that right,” Barr said. “I think there’s an important role for Congress right now in setting a framework.”
He added that if a CBDC is launched in the US, the stablecoin could become more popular among some people “if they are concerned about privacy and don’t trust the government.”
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