Several countries – including the US – are conducting research into the development of their respective central bank digital currencies (CBDC). However, ahead of plans to launch a “digital dollar” pilot in the US, some lawmakers are questioning the development of a CBDC in the country. US Congressman Alex Mooney has proposed a bill called the Digital Dollar Pilot Prevention Act (HR 3712). The law requires the Federal Reserve to halt research and development related to the launch of the CBDC, or digital dollar.
In his proposal, the US congressman said CBDCs could pose a threat to “law-abiding Americans.” The congressman continued conditions that these centralized digital currencies are “currently being used by authoritarian countries to crack down on dissenters.”
“This bill would prohibit the Federal Reserve from creating, operating, or authorizing any program designed to test the practicality of issuing any money.” CBDC‘ said the congressman.
A central bank digital currency (CBDC) is the virtual representation of a fiat currency on a blockchain network. Similar in functionality to cryptocurrencies but controlled by central banks – CBDCs are able to register permanent records of transactions on the blockchain while reducing national reliance on cash.
Despite its advanced usability, a group of US lawmakers has teamed up with Mooney on this proposal. A total of 14 Republicans in the House of Representatives voted to join the Congressman in supporting this bill. The proposal reportedly said that its acceptance “would prevent the Federal Reserve from overriding the will of Congress.”
Among other things, co-supporters of the bill agree because they fear that the CBDC poses a threat to citizens’ financial privacy and potentially opens the floodgates to government surveillance.
“The Federal Reserve attracted attention late last year with its CBDC pilot projects and even struck deals with the private sector to build potential CBDCs for the United States that went beyond traditional research,” Mooney added.
However, this is not the first time that policymakers in the US have spoken out against the launch of a digital dollar. Earlier, US Senator Ted Cruz introduced the No Digital Dollar Act, while Congressman Tom Emmer proposed the CBDC Anti-Surveillance State Act.
In the meantime, Hong Kong, China, IndiaAnd Australia are among the many countries accelerating their efforts related to their CBDC initiatives.
