United States Representative for Minnesota’s 6th district Tom Emmer introduced a bill that could change the central bank digital currency (CBDC) in this country. The potential law could forbid the U.S Federal Reserve to issue a digital asset.
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The government official claims CBDCs could bring more trade-offs and disadvantages for citizens than benefits. In that sense, he highlighted how China’s digital currency “fundamentally omit the benefits and protections of cash”.
The Asian giant has been developing its CBDC for several years and seems ready to roll it out sometime in the next, many believe that it will do so during the 2022 Beijing Winter Olympics. The digital asset has been created to improve the country’s payment system, but allegedly to detriment of people’s liberties.
The digital Yuan or e-CNY will be less anonymous, more vulnerable to censorship, and will let the government completely monitor everyone’s finances. In that sense, the U.S. government official claimed the following on China’s CBDC and his proposed bill:
(…) it is more important than ever to ensure the United States’ digital currency policy protects financial privacy, maintains the dollar’s dominance, and cultivates innovation. CBDCs that fail to adhere to these three basic principles could enable an entity like the Federal Reserve to mobilize itself into a retail bank, collect personally identifiable information on users, and track their transactions indefinitely.
Thus, a country’s financial system would be vulnerable to a single point of failure, a single gateway into the total control of a population. Furthermore, the government official believes a CBDC could become a surveillance tool that could give the U.S. a greater capacity to spy on its citizens. Emmer added:
Requiring users to open an account at the Fed to access a United States CBDC would put the Fed on an insidious path akin to China’s digital authoritarianism.
Could The U.S. Issue A CBDC Or Digital Dollar?
Emmer called for a CBDC issued by the U.S. to be “open, permissionless, and private”. The government official has been an active member in this country’s Congress to promote crypto regulations, and his bill presents a contrast between this central bank-supported digital assets, Bitcoin, and other decentralized cryptocurrencies.
The United States and its Federal Reserve have claimed to be studying the possibility of developing a CBDC. FED Chair Jerome Powell has acknowledged the potential benefits for this country’s payment mechanism if they were to integrate digital assets.
However, the U.S. has announced no plans to develop, create, or launch a central bank digital currency in the near future. Some government officials, including Emmer, believe the U.S. must embrace innovation to preserve its status as a major currency. The government official made the following statement in a press release:
In order to maintain the dollar’s status as the world’s reserve currency in a digital age, it is important that the United States lead with a posture that prioritizes innovation and does not aim to compete with the private sector. Simply put, we must prioritize blockchain technology with American characteristics, rather than mimic China’s digital authoritarianism out of fear.
As of press time, the total crypto market cap stands at $2.07 trillion with a 3.43% profit in 24-hours.