U.S. Congress Suggests Fed Should Consider ‘National Digital Currency’
U.S. Representatives French Hill (R-Ark.) and Bill Foster (D-Ill) have sent a letter to Federal Reserve Chairman Jerome Powell asking the central bank to consider creating a digital dollar.
“The Federal Reserve, as the central bank of the United States, has the ability and the natural role to develop a national digital currency,” the Congressmen wrote.
“We are concerned that the primacy of the U.S. Dollar could be in long-term jeopardy from wide adoption of digital fiat currencies. Internationally, the Bank for International Settlements conducted a study that found that over 40 countries around the world have currently developed or are looking into developing a digital currency.”
According to Foster and Hill, current cryptocurrencies are speculative investments, however their use may “increasingly align with that of paper money in the future.”
The congressmen commented on the use of private companies issuing currencies, including Facebook’s Libra token.
“The Facebook/Libra proposal, if implemented, could remove important aspects of financial governance outside of U.S. jurisdiction.”
Recent cryptocurrency efforts by J.P. Morgan and Wells Fargo were also mentioned.
Last year, Sheila Bair, the former Federal Deposit Insurance Corporation Chair recommended the Federal Reserve to research the development of a digital U.S. dollar.
“With the potential for digital currencies to further take on the characteristics and utility of paper money, it may become increasingly imperative that the Federal Reserve take up the project of developing a U.S. dollar digital currency,” the congressmen stated.