The U.S. House Financial Services Committee is advancing legislation to prevent the issuance of a central bank digital currency (CBDC) without Congressional approval.
Chairman Patrick McHenry announced that the committee will mark up two bills concerning a potential digital dollar. The Digital Dollar Pilot Prevention Act, H.R. 3712, prohibits the Federal Reserve from initiating CBDC pilot programs without Congress’s approval.
Another legislation is an amendment to the Federal Reserve Act, prohibiting Fed banks from offering certain products or services directly to individuals and prohibiting the use of CBDCs for monetary policy and other purposes.
The move comes despite the Federal Reserve’s recent denial of any decision on issuing a CBDC, although the Federal Reserve of San Francisco has been hiring for a CBDC project.
The prospect of a digital dollar has sparked debate in the U.S., with some politicians opposing it due to financial privacy concerns, while supporters argue it would maintain the dollar’s global relevance and boost cryptocurrency adoption.
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