A document submitted to Congress revealed that digital dollars remain among the main tasks of the U.S. Federal Reserve in the payment field.
The Federal Reserve has insisted it is not developing a CBDC and is only investigating digital dollars in case this position changes in the future. At a recent Senate hearing, Federal Reserve Chairman Jerome Powell told lawmakers that the central bank “does not recommend, let alone adopt (a CBDC) in any form.”
But a new document prepared for Congress shows the Federal Reserve still considers CBDCs one of its mandates. The document was shared by Tom Emmer (R-MN), an ardent critic of the digital dollar, who claimed it was prepared for the Federal Reserve’s presentation to Congress.
In line with its primary mission of being a payment system, the Federal Reserve will list CBDCs with automated clearinghouses, wholesale clearing services, check collection, and fiscal agents of the U.S. government.
If you don’t think the Federal Reserve is pursuing a CBDC, think again.
The Federal Reserve relayed this to my staff in an early presentation to this Congress. They consider CBDC as one of their main tasks. pic.twitter.com/0LcdWBKk58
— Tom Emmer (@GOPMajorityWhip) March 14, 2024
The Fed’s mission also includes FedNow, an instant payments system that connects all individual banks and payment networks and is available 24/7, similar to Brazil’s Pix and Hong Kong’s FPS. FedNow has been touted as a central bank digital dollar alternative, listing alongside CBDC.
A digital dollar remains one of the most controversial issues in the U.S. financial sector. Critics argue that it will become a tool for government surveillance. That includes Republican presidential candidate Donald Trump, who described it as a “dangerous threat to freedom.” Trump has promised that he will halt CBDC efforts if he takes office later this year.
Republican lawmakers have also pledged to stop the Federal Reserve’s pursuit of a digital dollar. Three weeks ago, four senators supported the CBDC Anti-surveillance Act introduced by Senator Ted Cruz (R-TX). They claimed the Biden administration was trying to invade Americans’ privacy and vowed to continue fighting the digital dollar.
The fate of U.S. CBDCs could be decided by public opinion polls this year. If a Republican takes office and strengthens their numbers in Congress, the digital dollar could be looking at a bleak future.
While the United States is avoiding CBDCs, other major economies, including BRICS, which are reportedly eyeing blockchain-based payment systems, are making progress. Russia, China, Hong Kong, and the Philippines have also stepped up CBDC efforts.
To learn more central bank digital currency Read on for some design decisions to consider when creating and launching. nChain’s CBDC Playbook.
Watch: Building a CBDC System on Bitcoin
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