Republicans Push To Halt CBDC, Democrats Warn Of US Falling Behind

The U.S. House of Representatives is set to deliberate on a new crypto bill after it received the green light from a committee on Wednesday.

This move signified a step forward for the digital assets legislative process in Congress.

The bill, championed by Republicans in the House Financial Services Committee, aims to regulate the potential introduction of a U.S. central bank digital currency (CBDC).

Rep. Patrick McHenry (R-N.C.), the committee's head, emphasized that the legislation sought to ensure that "any U.S. CBDC must be explicitly authorized by Congress" and will safeguard "Americans’ privacy and our financial system from the risks a CBDC would pose."

Amid looming concerns of a potential U.S. government shutdown, House members took a moment on Wednesday to emphasize the importance of regulating a potential digital dollar.

This legislation intends to preemptively halt any CBDC pilot initiatives, prohibit the Federal Reserve from launching a retail digital currency that might be used for monitoring citizens, and mandate that any advancements regarding a state-backed digital token receive explicit congressional approval.

This proactive stance by the House on CBDC regulation is a first, but its prospects in the Senate remain uncertain, especially given the contrasting views on digital assets held by the Senate Banking Committee's leader, Sen. Sherrod Brown (D-Ohio).

The digital assets realm will be a focal point of discussion at the upcoming Benzinga's Future of Digital Assets conference on Nov. 14.

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Meanwhile, the House committee's recent bill faced opposition from its leading Democrat, Rep. Maxine Waters (D-Calif.), who expressed concerns about the U.S. lagging behind other nations, like China, in the CBDC race.

Waters criticized the Republicans for their "deeply anti-innovation stance" on the technology, which she believed could hinder research and progress.

She warned of potential repercussions, including the dollar losing its dominant global position and U.S. citizens missing out on the benefits of swifter, more cost-effective and straightforward payment systems.

Earlier in the month Federal Reserve Chief Regulatory Officer Michael Barr clarified that any decisions regarding a CBDC would be contingent on directives from the White House and legislative authorization from Congress.

Contrary to some Republican assertions, the Biden administration has not yet introduced a digital dollar proposal and remains in the preliminary stages of understanding the implications of a U.S. digital token.

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