U.S House Committee Passes CBDC Development Restriction Bill

• The panel’s top Democrat, Rep. Maxine Waters (D-Calif.), voiced her opposition.
• The Senate, where Democrats have a majority, may provide significant opposition.

A measure to prevent efforts to establish a CBDC in the United States has been approved by a House committee. Concerns about impeding development and U.S. competitiveness in the international financial sector were at the forefront of the arguments that the contentious decision sparked on Capitol Hill.

The committee, which Rep. Patrick McHenry (R-N.C.) chairs, pushed for the measure to need express approval from Congress for any CBDC development. Furthermore, the Act prohibits any Federal Reserve projects that may be used for monitoring, with the goal of protecting the privacy of citizens.

Strong Opposition

However, the panel’s top Democrat, Rep. Maxine Waters (D-Calif.), voiced her opposition to the decision. She said the Republicans’ anti-innovation posture would cause the United States to fall behind other countries. Particularly China, in the race to establish international norms for CBDCs. Moreover, she cautioned that as a result, future payment methods for Americans risk sacrificing efficiency, convenience, and affordability.

The planned regulation has brought up worries regarding innovation, and its timeliness has been emphasized. The House acted despite continuing disagreements over other crucial financial reforms. Republican lawmakers were adamant about blocking efforts to create a CBDC.

The Senate, where Democrats have a majority, may provide significant opposition to this measure. Sen. Sherrod Brown (D-Ohio), who chairs the Senate Banking Committee, is less enthusiastic about digital assets than his fellow House Republicans.

Moreover, the Fed has been conducting preliminary studies in preparation for the eventual establishment of a CBDC. Michael Barr, the vice chairman for supervision, has made it clear that this kind of change would need an order from the White House and legislation from Congress.

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