US Lawmakers to Block Federal Reserve’s CBDC Testing
Alex Mooney is an American lawmaker who recently brought injunctions against CBDC testing for Federal Reserve. Central Bank Digital Currency (CBCD) has become a politically charged and controversial topic in the USA during recent times.
Politicians on both sides of the spectrum are fighting against each other to prove the advantages and disadvantages of the central bank digital currency project. Both sides agree on the technical incentives of CBDCs.
However, there is a group of legislatures that has raised questions on the matter of financial privacy and personal freedom with regard to CBDCs. The strata of opposition legislators maintain that CBDCs impose an Orwellian threat to society and can enable the government to track the financial data of citizens.
At the same time, the government may also retain the ability to block people from accessing their financial resources at any given time. Thus, the legislatures are working on bringing regulatory amendments to block the implementation of CBDCs in their jurisdiction.
The Federal Reserve has been working on the CBDC pilot since 2022. Banking enterprises such as BNY Mellon, PNC Bank, Mastercard, HSBC, TD Bank, Truist, Citi, Wells Fargo, and others will join the CBDC pilot to test the token for regulated liability network.
The project seems to emulate the CBDC projects of India and China. China introduced the digital Yuan as early as Olympic Village in Beijing. Meanwhile, the Indian government plans to introduce the digital rupee while hosting the G-20 2023 summit.
Some Congressmen are Supporting Crypto Industry
Meanwhile, in the USA, all Republican presidential candidates namely Robert Kennedy Jr., Ron De Santis, and Vivek Ramaswamy have talked about lending support to the crypto industry.
Meanwhile, Ramaswamy and Kennedy Jr. have also assumed a negative stance toward CBDCs. DeSantis has promised his voters to dispel CBDC projects to protect the financial freedom and privacy of US Citizens. The Digital Dollar Pilot Prevention Act is sponsored by 15 Republican House members including Mooney.
The bill intends to bar the US government from collecting private data of citizens and recording their financial history without their knowledge as happened in the NSA leaks scandal of 2013.
Federal Reserve Chairperson Jerome Powell has maintained that plans concerning the development and testing CBDCs are still in the works. He maintained that at present the Central Bank is only in the early stages of experimentation and exploration.
The recent statement suggests that Federal Reserve is still researching the wider impact of a CBDC pilot. However, the chief called for the recommendation of Congress in January on the matter of advancing the CBDC project.
However, he has maintained that the Central Bank would not continue to explore the CBDC pilot without the intervention of Congress. While appearing before Congress in January, he emphasized the importance of CBDCs as a matter of national priority that should not be treated as a partisan pursuit.
He also talked about stablecoins gaining popularity as a placeholder for digital dollar. Meanwhile, Coinbase CEO Brian Armstrong has called for the preservation of the crypto market as a matter of national security.
The chief official maintained that regulators should not ignore the role of crypto in the preservation of the value of fiat currencies. On the other hand, Powell also called upon Congress to issue a better regulatory framework for the crypto sector.
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