The Republicans tabled a bill alleging central bank digital currency (CBDC) has the potential to hinder the effectiveness of existing stablecoins. The lawmakers drawn from the Grand Old Party (GOP) consider CBDC likely to plunge the Americans into mass surveillance.
Republicans Allege CBDC Threatens to Erode Financial Preeminence
The bill challenges the promoters of CBDC by alleging that it waters down the US financial preeminence. Instead, the Republicans consider CBDC as edging the US towards authoritarianism. The GOP bill revisits the unresolved Congress debate to halt CBDC progress.
The House Financial Services Committee (HFSC), in a Thursday, September 14 hearing, examined three bills aimed at capping the Federal Reserve’s capability to establish and run CBDC. The trio of bills have their sponsors drawn from the Republicans.
Republicans-Sponsored Bills Target Capping Fed’s Involvement in Digital Currency
The bills capture provisions prohibiting the Fed from digital currency issuance and crypto-related banking services. The bills obligate the Fed to seek express Congress approval.
In his role of chairing the digital assets subcommittee in HFSC, Representative French Hill started the session with a perspective of dismissing CBDC. Hill reiterated to the audience that the subcommittee does not favor CBDC in Congress.
The Republicans derive their opposition against CBDC for several concerns. Primarily, they consider the digital dollar threatens to disrupt the traditional banking sector.
CBDC Potential to Encroach Stablecoins Segment
The republican lawmakers consider CBDC as likely to encroach on the stablecoins segment. They consider that stablecoins involve privately issued digital assets whose value is pegged to the fiat currencies. They added that the stablecoins have proved critical in their usage by traders in entering and exiting positions without interference with fiat.
Several Republicans portray the bleaker picture that adopting CBDC would plunge the US into China-style authoritarianism. Representative Warren Davidson restated his vocal support for cryptocurrency by warning against approving leeway for a wrongly structured money system.
CBDC Threatens to Eliminate Western Civilization
Representative Davidson considers that CBDC could offer the largest existential threat condemning Western civilization to obsolescence. The lawmaker echoed previous pronouncements demanding that Congress criminalize CBDC development.
Davidson referenced the Lord of the Rings, where a single ring commanded authority over all subjects to district the state in the CBDC project. As such, he considers the need for fellow lawmakers to cast the proposal into a flaming fire.
Democrats expressed support for extending the ongoing CBDC research. Their perspective portrays the fear of missing out since hundreds of nations are experimenting or piloting the CBDC.
Democrats Decry Insincerity by Rival Camp for Opposing CBDC
Representative Steve Lynch’s remarks condemned the cryptocurrency industry for propagating fear regarding a weaponized CBDC. The Massachusetts lawmaker warned that failure by the US to recognize the merits of CBDC would slide the US behind its developed peers and rivals.
Lynch questioned the allegations that Republicans feared CBDC would leave Americans vulnerable to potential government surveillance. He wondered why the Republicans hardly held similar concerns regarding the private corporations issuing stablecoins.
Lynch dismissed the surveillance claim by labeling it counterintuitive since the Republicans failed to express concerns regarding data privacy that local and foreign companies aggregate and sell daily.
The opposition lodged by Republicans to CBDC is receiving vocal support from several presidential candidates. Florida governor Ron DeSantis has in the past rallied against CBDC. Biotech investor Vivek Ramaswamy has publicly opposed CBDC.
The Biden administration portrays a consistent stance toward supporting the ongoing CBDC research. The administration cites the September 2022 report by the White House illustrating the potential benefits of CBDC. Nonetheless, the report supports the need for further research, though not explicitly ordering its adoption.
Meanwhile, the Fed acknowledged pondering the prospect of CBDC. Its supervision vice chair, Michael Barr, indicated in the previous week that the Fed has yet to decide on the CBDC launch.
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