Emmer and House Financial Services Republicans File Comments on Possible US Digital Currency
U.S. Representative Tom Emmer (R-MN) is among two dozen Republican members of the U.S. House Financial Services Committee who have gathered to comment on the possibility of a U.S. central bank digital currency (CBDC ).
The Federal Reserve released its working paper, “Money and Payments: The US Dollar in the Age of Digital Transformation,” in January and called for comments by May 20. Representative Emmer and his colleagues provided comments in a May 18 letter sent to Jerome. Powell, Chairman of the Board of Governors of the Federal Reserve.
“As the Fed considers its next steps, we believe it is necessary to first understand the problems a CBDC would solve,” the lawmakers wrote. “Additionally, we believe the Fed should understand whether the benefits of a CBDC outweigh the risks to commercial banks, the existing payments system, and consumers.”
In their letter, which is led by U.S. Representatives Ann Wagner (R-MO) and Patrick McHenry (R-NC), deputy and ranking member, respectively, of the House Financial Services Committee, the Republicans reiterated their published principles in November 2021 to guide the discussion on a possible CBDC in the United States.
Rep. Emmer helped develop the principles, along with committee members including Rep. Wagner, as well as U.S. Reps. Bill Huizenga (R-MI), Frank Lucas (R-OK), Andy Barr (R-KY), French Hill (R-AR), Bryan Steil (R-WI) and Anthony Gonzalez (R-OH).
“Without caution, a U.S. central bank digital currency could set us on the path to China’s digital authoritarianism,” said Rep. Emmer, who wants to “examine the problems that a central bank digital currency would solve.” before developing and launching one”.
“Any CBDC in the United States must be open, permissionless, and private — like cash,” he said in a separate May 19 statement. “Anything less is a disservice to the American people and our democratic values.”
The members’ principles, they wrote, revolve around numerous issues on which the Fed seeks comment, and as the Fed moves forward, it should focus on four specific areas: identifying inefficiencies in the U.S. payments system and determine if a CBDC resolves them; ensure that future digital currency policies continue to promote private sector innovation and foster competition; provide a detailed analysis of the possible impact of a CBDC on monetary policy tools and Fed decision-making; and fully understand the potential impact a digital currency would have on Americans’ civil liberties and privacy rights before considering any legislative action.
“The Fed recognized that it would be difficult to provide adequate security for a CBDC,” Rep. Emmer and the lawmakers wrote. “Further consideration is needed on how the Fed will balance privacy rights and transparency, particularly as they relate to deterring criminal activity and where anti-money laundering issues are present. “