Nine US lawmakers have expressed concerns about the US central bank’s digital currency project, led by the Federal Reserve Bank of Boston. Lawmakers stressed: “Any US CBDC must be open, permissionless and private.”
Congressmen say any US CBDC must be open, permissionless and private
U.S. Congressman Tom Emmer (R-MN) announced Thursday that he is leading an investigation into central bank digital currency (CBDC) efforts led by the Federal Reserve Bank of Boston.
Emmer and eight other members of Congress sent a letter to Susan Collins, president and CEO of the Federal Reserve Bank of Boston, expressing their concerns about Project Hamilton, a US initiative to develop CBDC along with a digital currency initiative at the Massachusetts Institute of Technology. Technology (MIT).
“It has been brought to the attention of Congress that some of the firms involved in Project Hamilton intend to use government resources in the project to design CBDCs with the intention of selling these products to commercial banks,” Emmer said, emphasizing:
Any US CBDC must be public, non-permissive and private.
“If a CBDC is not designed with transparency values in mind, the currency is at risk of financial privacy breaches currently being exhibited in China,” he said.
“The more we learn about the Boston Fed’s work on Project Hamilton, the more concerned we become about the lack of transparency, particularly regarding their partnership with the private sector,” the congressman continued:
Every American should be concerned about the unfair advantage that some private companies can gain from this partnership and the failure to uphold the principles of privacy, sovereignty, and free markets.
The letter specifically asks about Project Hamilton’s funding and engagement with the private sector, as well as the Fed’s plans to address concerns about threats CBDCs may pose to financial privacy and financial freedom.
“It is important that firms engaged in Project Hamilton do not gain an unfair competitive advantage over current or future competitors. “Neither the federal government nor the Federal Reserve Banks should be in the business of picking winners and losers in private markets,” the letter concludes.
In January, Emmer introduced a bill that would prohibit the Fed from issuing central bank digital currency directly to individuals. “It’s important to note that the Fed does not and should not have the authority to offer retail bank accounts,” he said.
Earlier this month, the Federal Reserve Bank of New York completed the first phase of a digital dollar experiment called Project Cedar. The New York Fed is now collaborating with nine major banks on a “proof-of-concept project to explore the feasibility of a theoretical payment system that would facilitate wholesale transactions of digital assets.”
Do you think the US will issue an “open, permissionless and private” CBDC as described by Congressman Tom Emmer? Let us know in the comment section below.
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