On Friday, Congressman Alex X. Mooney (R-VA) introduced legislation to prevent a digital dollar, or Central Bank Digital Currency (CBDC) pilot program through the Federal Reserve. H.R. 3712, known as the Digital Dollar Pilot Prevention Act aims to close a loophole that the Federal Reserve is using in CBDC pilot projects, which drew attention last year for involving the private sector.
CBDC pilot projects are being conducted by other governments like China and Brazil, who announced Visa and Microsoft joined the endeavor earlier this week. China rolled out its most ambitious use of the digital yuan last month, paying public sector workers in the eastern city of Changshu with the digital currency, known as e-CNY. The digital yuan incorporates blockchain technology to create a traceable digital ledger and had already been trialed in the city of 1.7 million residents.
The Atlantic Council, a U.S. taxpayer-funded DC-based think tank focused on NATO policies, offers an online CBDC tracker showing 18 nations with pilot programs, mostly in Europe, Asia, North America, and the Middle East. The tracker also shows 32 nations in development, including the U.S., and 11 launched currencies, globally.
Congressional Republicans have maintained that the Federal Reserve lacks the statutory authority to issue a CBDC without Congressional approval, while the Fed has left ambiguity surrounding its position.
Highlighting threats to the liberties of law-abiding Americans and CBDC’s use by authoritarian regimes to suppress dissent, Rep. Mooney wrote in a press release:
Congress cannot give an inch when it comes to CBDCs. CBDCs would threaten the liberties of law-abiding Americans and are being used by authoritarian countries right now to crack down on dissent. That’s why closing this pilot program loophole is so important—to prevent the Federal Reserve from bypassing the will of Congress. I am proud to introduce this legislation to do exactly that.
Rep. Mooney is joined by 14 House Republicans as co-sponsors on H.R. 3712 including Pete Sessions, Bill Posey, Ralph Norman, Byron Donalds, John Rose, Andy Ogles, Jeff Duncan, Greg Steube, Randy Weber, Glenn Grothman, Ronny Jackson, Victoria Spartz, Harriet Hageman, and Bob Good.
Also joining in support are organizations such as Club for Growth, Heritage Action, FreedomWorks, Americans for Tax Reform, and American Blockchain Initiative.
President of Club for Growth, David McIntosh, said that the Federal Reserve’s obligation is to tame “Bidenflation,” not follow in China’s footsteps, writing:
The Federal Reserve should never develop a Central Bank Digital Currency (CBDC). Moreover, spending time and taxpayer resources on research or pilot programs would be an end-around on Congressional intent, authorization, or jurisdiction. The Federal Reserve should be focused on fulfilling its formal mandate of taming Bidenflation, not mimicking China.
Alex Allaire, the Co-Founder and Chief Executive Officer of American Blockchain Initiative also gave the Chinese government a lashing, writing:
China’s notorious digital yuan rollout is also a ‘pilot program’ that has been nothing but a dystopian pet project for Communist central-planners.
Rep. Mooney blasted China’s pilot of the digital currency as targeted at CCP dissenters, saying that his legislation aims to stop U.S. development “dead in its tracks.” Additional concerns have been raised regarding how a digital dollar may adversely impact privately-issued cryptocurrencies.
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