US Lawmakers Want to Block Federal Reserve’s CBDC

The move against the Federal Reserve’s CBDC testing reflects rising concerns around digital currencies and civil liberties.

Congressman Alex Mooney holding a CBDC in a paused blur.
Created by Kornelija Poderskytė from DailyCoin
  • Congressman Alex Mooney introduces legislation to halt Federal Reserve’s CBDC testing.
  • The bill cites potential threats to the liberties of American citizens.
  • The Federal Reserve CBDC remains in the preliminary stages.

Central Bank Digital Currency (CBDC) has been controversial since its inception. Critics cite the Orwellian powers it grants to the governments, from tracking all transactions to cutting people out of the financial system. Now, a growing number of US Republican lawmakers are taking concrete steps against its implementation. 

On Tuesday, May 30, Congressman Alex Mooney proposed a bill to block the Federal Reserve from testing a CBDC pilot. The bill raises concerns about potential infringements on the liberties of Americans.

The Digital Dollar Pilot Prevention Act

The legislation in question, known as the Digital Dollar Pilot Prevention Act, seeks to prevent the Federal Reserve from launching, conducting, or approving any program related to testing a potential CBDC. The bill is co-sponsored by fourteen other House Republicans. 

Specifically, bill supporters fear digital currency could pave the way for governmental overreach and surveillance. As a counterpoint, proponents argue that a CBDC could streamline financial transactions and provide access to financial services for the underbanked.

The Federal Reserve’s Stance on CBDCs

Despite the pushback from lawmakers, Federal Reserve Chairman Jerome Powell revealed that decisions around the development of a CBDC are not definitive yet. Instead, the central bank is engaged in early-stage experimentation and exploration. 

Powell’s comments suggest that the Federal Reserve is taking a measured approach and is considering the broader implications of issuing a CBDC.

On the Flipside

  • Other countries have moved forward with their CBDC initiatives in the international arena. China, for instance, has already rolled out its digital yuan.
  • CBDCs could offer various benefits, such as improved financial inclusion and more efficient payment systems.

Why This Matters

The legislation, if successful, will have far-reaching effects on the future of money and financial systems. The United States‘ path will likely significantly shape the global discourse on digital currencies.

Read more about CBCDs: 

Central Bank Digital Currency (CBDC): What to Know

Read more about the latest developments in DeFi tech:

Orbs Launches dLIMIT Tool to Boost DeFi Trading

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.