US lawmaker, Jim Himes has advised Congress to look into the introduction of a US CBDC (digital money) for the United States.
Jim Himes, a representative from Connecticut in the House, has put out a proposal that aims to open a discussion about the possibility of the US introducing a central bank digital currency or CBDC.
Rep. Jim Himes declared, “It is now time for Congress to start the process of contemplating and ultimately adopting authorizing legislation for the issuance of a U.S. CBDC.”
Himes encouraged Congress to start looking into the introduction of a digital dollar printed by the Federal Reserve in a white paper published on Wednesday in order to keep up with advancements in financial technology.
The American legislator claims that a CBDC
“should not be thought of as replacing legacy payment systems and currencies but as an additional alternative for consumers and businesses.”
In comparison to fiat currency, the white paper outlined a scenario in which a CBDC might raise issues with regard to transparency, security, and privacy. Himes noted that the Federal Reserve and “participating commercial entities” should set guidelines for any regulatory framework on CBDCs that Congress enacts, as well as “strong user identification processes that require intermediaries to confirm the identity of wallet holders.”
“The longer the United States government waits to embrace this innovation, the further we fall behind both foreign governments and the private sector,” said Himes. “It is time for Congress to consider and move forward with legislation that would authorize a U.S. CBDC.”
If policymakers decide to introduce a digital dollar, various departments and agencies within the U.S. government have researched its potential consequences. In a paper published in May, the Fed came to the conclusion that “the starting conditions of the Federal Reserve’s balance sheet are significantly dependent on the implementation of monetary policy from a retail CBDC.”
Himes is a prominent proponent of congressional action on cryptocurrencies among American legislators, particularly with regard to the technology being used to monitor Russia’s capacity to evade sanctions. Himes also introduced a provision of a bill that many criticized for giving the Treasury Secretary unchecked authority over specific crypto transactions. As evidence that lawmakers have not yet come to an agreement on a U.S. CBDC, Minnesota Representative Tom Emmer filed a measure in January that would forbid the Fed from functioning as a retail bank in the possible issuance of a digital currency.
