Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee released a statement on the Board of Governors of the Federal Reserve System’s (Federal Reserve) discussion paper regarding a potential U.S. central bank digital currency (CBDC).
“As a growing number of Americans and businesses engage with or invest in digital assets such as stablecoins and other cryptocurrencies, my Committee is reviewing how they are increasingly affecting many aspects of our lives and our financial system,” said Chairwoman Waters. “On central bank digital currencies, yesterday’s report from the Federal Reserve is the first step in outlining the benefits and challenges with the United States’ potential issuance of its own CBDC. Unlike private digital assets, a CBDC issued by the Federal Reserve would be backed by the full faith and credit of the U.S. government, like the dollar bills in our wallets, and hold the promise of deepening financial inclusion for underserved communities as more economic activity moves online.
“Today, the U.S. dollar is the most widely used currency in the world, serving as the basis of financial contracts for all types of business transactions, which translates to American consumers as lower prices for goods and services. But its role as the world’s reserve currency is under threat by emerging powers like China that are creating their own CBDCs. The Federal Reserve has an important role to play in maintaining the U.S. dollar as the world's reserve currency, and policymakers and regulators must make sure that neither foreign governments’ digital currencies nor digital assets issued by private entities weaken the U.S. dollar’s stature or harm our economy.
“In its report, the Federal Reserve uncovered many of the same advantages and concerns that have been reviewed by my Committee, and its further exploration of such a system is warranted. As the report highlights, a U.S. CBDC has the potential to create significant improvements in financial inclusion, one of my priorities, so we can ensure that the unbanked, low- and moderate-income consumers, and people of color are fully included in our rapidly evolving financial system. At the same time, the Federal Reserve must address consumer privacy and cybersecurity concerns on any CBDC that is issued.
“Last Congress, I established the Task Force on Artificial Intelligence as well as the Task Force on Financial Technology to take a closer look at the growth of emerging technology. This Congress, I also created the Digital Assets Working Group, which has undertaken a deep dive on regulatory and policy issues related to digital assets, including holding four hearings on CBDCs and other digital assets. My Committee continues to bring together the key financial regulators that we oversee, including the SEC, the OCC, the Federal Reserve, and the FDIC, to provide insight into the rapid growth of digital assets to ensure that these new technologies and services are helping, and not harming, everyday people as they access our financial system. My Committee is laser-focused on financial inclusion as the Federal Reserve investigates the development of CBDCs. So, I expect that in the coming months the Federal Reserve will continue to explore CBDCs and request input from diverse financial experts, including diverse asset managers, community development financial institutions and minority depository institutions, as well as consumer and civil rights groups, to ensure that low-income communities and communities of color contribute to the development of a CBDC. I look forward to continuing to work with the Federal Reserve and all other relevant regulators on this very important issue.”
In May 2019, Chairwoman Waters announced the creation of the Committee’s Task Forces on Financial Technology and Artificial Intelligence. In April 2021, the Committee reauthorized the Task Forces on Financial Technology and Artificial Intelligence for the 117th Congress.
In June 2021, Chairwoman Waters announced the establishment of the Digital Assets Working Group of Democratic Members. In the same month, the Task Force on Financial Technology held a hearing entitled, “Digitizing the Dollar: Investigating the Technological Infrastructure, Privacy, and Financial Inclusion Implications of Central Bank Digital Currencies,” and the Subcommittee on Oversight and Investigations held a hearing entitled, “America on “FIRE”: Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?”
In July 2021, the Subcommittee on National Security, International Development and Monetary Policy held a hearing entitled, “The Promises and Perils of Central Bank Digital Currencies.”
In December 2021, Chairwoman Waters held a hearing entitled “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States.”