If the United States Federal Reserve (Fed) is able to force customers to open an account in order to qualify for a digital dollar, that would put it “down an insidious path akin to China’s digital authoritarianismsays US lawmaker Tom Emmer.
“The Fed does not have the authority to offer retail bank accounts”
Minnesota Republican elected to the United States House of Representatives, Tom Emmer, announced that he would introduce a bill to prevent the Federal Reserve, the central bank of the United States, from acting as a retail bank in the potential issuance of a digital dollar.
In an announcement on Wednesday, January 12, Emmer said that The law project would prohibit the Fed from offering central bank digital currency (CBDC) directly to US consumers. According to the Minnesota state representative, if the bank is able to force its customers to open an account in order to qualify for a digital dollar, it would put it “down an insidious path akin to China’s digital authoritarianism“.
“The Fed doesn’t have, and shouldn’t have, the power to offer retail bank accountssaid Emmer. “Regardless, any CBDC implemented by the Fed must be open, private, and permissionless. This means that any digital dollar must be accessible to everyone, transact on a blockchain that is transparent to everyone, and preserve the privacy elements of cash.»
In addition to allegations of potential financial oversight, US lawmakers have criticized the Fed’s deployment of a CBDC as being too centralized. Emmer felt that this could make users’ personal information vulnerable to attack. According to him, a digital dollar should aim to protect financial privacy, maintain the dominance of the country’s fiat currency and encourage innovation.
Emmer wants clearer regulations for crypto-assets
Emmer introduced the new bill just a day after Federal Reserve Chairman Jerome Powell announced that the Fed will release its report on CBDCs in the coming weeks. During a hearing before the Senate Banking Committee, the Fed Chairman also answered in the affirmative when Senator Pat Toomey questioned the Federal Reserve’s ability to act as a retail bank.
“Some want, as you know, a central bank digital dollar to be used and developed in such a way that Americans have retail accounts with the Fed, and the Fed becomes the retail banker in the United States“, launched Toomey. “It seems to me that there is absolutely nothing in the history, experience, expertise and capabilities of the Fed that could allow it to be a retail bank.»
By introducing bills in May and July 2021, Emmer has already advocated for greater regulatory clarity regarding digital assets in the United States, which would be provided by legislation. Speaking directly to the Chairman of the United States Securities Commission (SEC), Gary Gensler, Emmer and other lawmakers also questioned the SEC’s decision not to approve a Bitcoin (BTC) ETF.
Meanwhile, the Federal Reserve estimated in a report published in October 2021 that issuing a CBDC could, in the future, strengthen the role of the US dollar as a global reserve currency.
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