The U.S. House Financial Services Committee is advancing two bills that would block the creation of a digital dollar by the Federal Reserve. The Committee’s chairman, Patrick McHenry, announced that the bills will be discussed and amended on Sep. 20. The bills are part of a broader effort to limit the Fed’s power and influence over the U.S. economy and monetary policy.
The first bill, titled the “Keep Big Tech Out of Finance Act”, would prohibit large technology companies from offering financial services or issuing digital currencies. The bill is aimed at preventing companies like Facebook, Google, or Amazon from competing with or disrupting the traditional banking system. The bill defines a large technology company as one that has an annual global revenue of more than $25 billion and offers an online platform for connecting third parties.
The second bill, titled the “No Digital Dollar Act”, would prevent the Fed from developing or issuing a central bank digital currency (CBDC). A CBDC is a digital form of fiat money that is backed by the central bank and can be used for payments and settlements. The bill is aimed at preserving the role of the U.S. dollar as the world’s reserve currency and protecting the privacy and security of U.S. citizens.
The bills are likely to face opposition from some lawmakers and experts who support the idea of a digital dollar. They argue that a digital dollar could enhance financial inclusion, efficiency, and innovation, as well as counter the rise of other digital currencies, such as China’s digital yuan or private stablecoins. They also claim that a digital dollar could be designed and regulated in a way that safeguards the interests and rights of the users.
The debate over a digital dollar has been intensifying in recent years, as more countries and companies are exploring or launching their own digital currencies. The Fed has been studying the potential benefits and risks of a CBDC, but has not made any decision on whether to issue one. The Fed’s chairman, Jerome Powell, has stated that the Fed is moving cautiously and carefully on the matter, and that it is more important to get it right than to be first.