For the senator, the main concern has to do with the fact that the EDF use the CBDC to become a retail bank and finance residents and/or entities. It also ensures that a digital dollar must be a guarantor of innovation and keep the values associated with the US currency present at all times.
Tom Emmer, representative for the state of Minnesota to the US Senate, revealed today that he plans to present a bill to limit the amount of money that can be issued by the US Federal Reserve (FED) in case the creation of a digital dollar becomes official.
Bill to limit the scope of the EDF over one CBDC
The news was shared by Emmer himself through his official Twitter account. Twitter, where he wrote the following:
“Today, I introduced a bill prohibiting the Fed from issuing a central bank-backed digital currency directly to individuals. Here I detail why this is important.
Today, I introduced a bill prohibiting the Fed from issuing a central bank digital currency directly to individuals. Here’s why it matters: pic.twitter.com/S7pQ5rVc6n
— Tom Emmer (@RepTomEmmer) January 12, 2022
The tweet was accompanied by a thread of messages in which the representative justifies the intention behind this measure, which is mainly to ensure that the EDF mishandle the CBDC to the detriment of the US dollar itself, this presumably in the face of the position that the state agency has maintained in relation to the overprinting of banknotes in the framework of the pandemic due to COVID-19, with the intention of financing projects to support citizens at the expense of generating higher inflationary levels.
With this, the official also wants to prevent the EDF continue along the same path that the Chinese government has been taking with its digital yuan, which it sees as a control mechanism for the financial freedoms of residents. In that sense, Emmer commented:
“While other countries, such as China, develop a CBDC that basically bypasses the benefits and protections of cash, it is more important to ensure that it never violates the United States digital currency policy, that is, that it is a guarantor of privacy. finance, maintain dollar dominance, and cultivate innovation.”
And I add:
“The Fed does not have, and should not have, the authority to offer retail bank accounts. Regardless, any CBDC implemented by the FED must be open, permissionless, and guarantee user privacy. This means that any digital dollar must be accessible to everyone, transact on a blockchain that is transparent to everyone, and maintain the privacy elements of cash.”
Concerns about the EDF
An interesting aspect to note is that Emmer’s initiative takes place one day after the president of the Fed, Jerome Powell, report to the Senate Banking Committee that the report on digital currencies and CBDC it was already ready, but that it would be published in the next few weeks.
During that meeting, Powell made several comments, including the fact that he had stated that a CBDC it could coexist with stablecoins on the market, as long as the latter abided by the relevant regulations. Another particularly contentious point raised by Senator Pat Toomey was the concern that the EDF operate as a retail bank:
“Some have argued, as you know, that a digital central bank dollar be used and developed in such a way that American individuals have retail accounts with the Federal Reserve, and the Federal Reserve becomes the retail banker of the United States. It seems to me that there is absolutely nothing in the history, the experience, the expertise, the capabilities of the FED, that lead it to be a retail bank”.
For now, the eyes of users and analysts in the digital currency sector are on the Fed, since in a report released earlier this month it was revealed that the agency plans to begin implementing more aggressive changes in the measures that it had maintained to date to support the local economy in the framework of the pandemic due to COVID-19, among which the repurchase of sovereign bonds and the fact of maintaining bank interest rates close to zero stand out.
Fountain: Cointelegraph, Twitter
Angel Di Matteo version / DailyBitcoin
Picture of Unsplash