In a letter, members of the House Financial Services Committee inquired about the Fed’s rationale for issuing a CBDC and inquired if the Fed would require an “explicit statute” from Congress to issue a digital currency.
Before the deadline set by President Joe Biden’s executive order on digital assets, Republicans on the House Financial Services Committee are requesting further information from the Federal Reserve System about a prospective US Central Bank Digital Currency.
Wednesday, lawmakers sent a letter to Board of Governors Vice Chair Lael Brainard requesting clarity on the Fed’s reasoning about a prospective digital currency, especially if restricting the use of digital assets is a goal.
In May, Brainard testified on the possible consequences of Fed-issued digital money. She said on Wednesday at a banking industry conference that the central bank still has to address fundamental concerns about the eventual development of a digital dollar and that a decision is not near.
The legislators, backed by the committee’s senior Republican Rep. Patrick McHenry (R-N.C.), want to know if the Fed feels it requires Congressional permission to go ahead with a digital dollar and whether the Fed will issue accounts for individual Americans, a move that could dramatically upset the banking system.
Brainard said in her May hearing that the Federal Reserve would need backing from Congress and the executive branch in order to launch a digital currency. Republicans who signed the letter demanded an explicit response as to whether the Fed believed a digital currency would need a new statute from Congress.
“In your perspective, does support need an explicit statute from Congress permitting the Federal Reserve to create a digital currency?” The authorities demanded a written response by September 30 from Brainard.