McHenry, Emmer Lead Inquiry into Boston Fed-Led CBDC Effort
Washington,
December 1, 2022 -
Today, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), and the Ranking Republican on the House Financial Services Subcommittee on Oversight and Investigations, Tom Emmer (MN-06), led a letter to Susan Collins, President of the Federal Reserve Bank of Boston, about “Project Hamilton,” an initiative to research the development of a central bank digital currency (CBDC).
A central bank digital currency is a programmable digital currency issued from a federal reserve. If the CBDC is not crafted with the values of transparency in mind, the currency falls at risk to the financial privacy violations currently on display in China.
It has come to Congress’s attention that some firms participating in Project Hamilton intend to use government resources from the project to design a CBDC with the intent to then sell those products to commercial banks.
Specifically, the letter asks about Project Hamilton’s funding and engagement with the private sector as they seek to develop a CBDC. The letter also asks how the Fed plans to address concerns that many have regarding the dangers a CBDC could pose to financial privacy and financial freedom, which were the subject of over 65% of the letters in response to the Fed’s January 2022 report on CBDCs.
McHenry and Emmer were joined on the letter by House Financial Services Committee members Ann Wagner (MO-02), Ted Budd (NC-13), Bill Huizenga (MI-02), Andy Barr (KY-06), French Hill (AR-02), Anthony Gonzalez (OH-16), and Warren Davidson (OH-08).
Background:
Project Hamilton is a collaboration between the Federal Reserve Bank of Boston and the Digital Currency Initiative at the Massachusetts Institute of Technology to research the potential development of a central bank digital currency (CBDC) in the United States.
You can read the letter in full here.
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