US lawmaker makes the case for a digital dollar

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Connecticut House of Representatives Member Jim Himes has released a proposal to start a dialogue on the potential US launch of a central bank digital currency, or CBDC.

In a white paper released Wednesday, Himes urged Congress to begin exploring the deployment of a digital dollar issued by the Federal Reserve to prevent the government from falling behind in fintech innovations. According to the US legislator, a CBDC “should not be seen as a replacement for legacy payment systems and currencies, but as an additional alternative for consumers and businesses”.

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The whitepaper presented a proposal in which a CBDC could raise concerns about transparency, security, and privacy in relation to fiat currency. Himes added that any regulatory framework on CBDCs enacted by Congress should include “robust user identification processes that require intermediaries to certify the identity of wallet holders,” the Federal Reserve, and “participating business entities.” establishing guidelines.

“The longer the United States government waits to adopt this innovation, the further we fall behind both foreign governments and the private sector,” Himes said. “It is time for Congress to consider and move forward with legislation that would authorize a US CBDC.”

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Source: CBDC White Paper, representing Jim Himes.

Different agencies and departments of the US government have explored the possible effects of a digital dollar should officials decide to launch one. In May, the Fed released a report concluding that “a retail CBDC’s monetary policy implementation is highly dependent on initial Federal Reserve balance sheet conditions.”

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Among lawmakers in the United States, Himes has often pushed for congressional action on cryptocurrencies — particularly regarding the technology used to check Russia’s potential to evade sanctions — and presented a section of a bill that many have criticized as giving the Secretary of the Treasury unchecked power. on certain crypto transactions. Minnesota Rep. Tom Emmer also introduced a bill in January aimed at preventing the Fed from acting as a retail bank in the potential issuance of a digital dollar, suggesting that lawmakers are not yet reached consensus on an American CBDC.

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