U.S. Republican senators have introduced a bill to ban central bank digital currency(CBDC), which is backed by the Federal Reserve.
TheBiden administration and the Fed are still exploring possible uses for CBDC, The Hill reported. on February 26, Senator Ted Cruz (R-TX) expressed concern about “programmable money.”
“Programmable money, which, if not designed to emulate cash, could provide the federal government with…vital data at the transaction level, all the way down to the individual user,” the senator argued.
According to The Hill, the Republican Party ‘s latest proposal has increased discussion of the Federal Reserve’s stablecoin technology, suggesting that party divisions may be influencing decisions.
Republican senators have proposed legislation that would seek to prevent the Federal Finance Commission from producing its own digital currency for individuals. It would also prohibit retail banks, cooperative credit unions, financial cooperatives and other financial institutions from producing these digital currencies for their customers or members.
Any decision to introduce a digital currency may be the safest asset for the US public, said Jerome Powell, Fed chairman. However, it will have to get Congressional approval to issue a digital dollar.
Powell said: “Like existing forms of money, CBDC would enable the general public to make digital payments.” “But as a Federal Reserve commitment, CBDC would be the safest digital asset available to the general public, without the associated credit and liquidity risks.”
TheBiden administration continues to explore the possibilities of cryptocurrencies and digital technologies. The executive order, which was issued in 2022, called for a thorough study of the feasibility of integrating these technologies into the US economy.
The White House said: “Recognizing the potential benefits and risks of U.S. central bank digital currency (CBDC), the reports encourage the Federal Reserve to continue its ongoing research, experimentation and evaluation of CBDC.”
Nellie Liang, Under Secretary of the Treasury for Domestic Finance, said: “Both real-time payment systems and CBDC offer opportunities to build a more efficient, competitive and inclusive U.S. payment system.”
