PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Dems and GOP Each Offer New CBDC Legislation

Steve Murphy by Steve Murphy
April 4, 2022
in Analysts Coverage, Digital Currency
0
Dems and GOP Each Offer New CBDC Legislation

Dems and GOP Each Offer New CBDC Legislation

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

This headline announces a couple new pieces of proposed legislation, one a follow-up to a January 2022 offering and another potential bill, one from each side of the political aisle. So the term ‘multiple’ might be a bit much, depending on the particular definition of that word. In any event, both offerings point to the preponderance of concern over privacy in how U.S. legislators will be thinking about CBDCs. This is not really much of a surprise and is certainly one of the main points discussed in ongoing position statements by Fed governors and the testing underway between the Boston Fed and MIT.

‘On Wednesday, Republican Senator Ted Cruz published a Bill that bans the Federal Reserve from issuing a central bank digital currency (CBDC) direct to the public. It’s a companion Bill to one published by Republican Congressman Tom Emmer in January. Earlier this week, Democrat Congressman Stephen Lynch released another digital dollar-related Bill…

Both sets of Bills focus on privacy, but the Democrat’s draft also emphasizes financial inclusion and aims to see digital dollar pilots conducted by the Treasury, not just the Federal Reserve.’

The major differences in the most recent proposed laws is that the Republican versions are extremely short (two pages) and simply seek to prevent the Fed from issuing digital dollars directly to consumers, and that they should be permissionless, blockchain-based currencies. The Democrat version is longer and gets into the inclusion theme and anonymity (akin to cash) language. This version also calls for a digital currency pilot to be undertaken by Treasury, not the Fed, with certain target dates involved that are not necessarily aligned with the recent EO from the White House. Not particularly coordinated with efforts underway, but also not surprising. More to come on this for sure.

‘Lynch’s bill calls for both anonymity of digital currency transactions, as well as anti money laundering (AML) compliance. At first glance, these two demands appear mutually exclusive. However, CBDC models are being discussed that require AML at the point of issuing the digital currency, but once the money is in a wallet, the transactions are anonymous. Hence, the payer cannot be identified…

However, AML is often challenging for the underbanked. And this model does not address the risk of a future government preventing certain groups from having access to a digital dollar.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

Tags: CBDCCentral Bank Digital CurrencyCongressDigital CurrencyFederal ReserveU.S. Treasury
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    5 Ways to Protect Your Financial Institution from a Cyberattack

    5 Ways to Protect Your Financial Institution from a Cyberattack

    May 26, 2023
    traditional banks

    How Traditional Banks Can Modernize Without Risk

    May 25, 2023
    identity fraud

    Javelin’s Identity Fraud Study Highlights the Changing Nature of Fraud

    May 24, 2023
    SASE, security-as-a-service

    Security-as-a-Service Secures
    Distributed IT Models

    May 23, 2023
    mule. real-time

    Early Detection of Mule Activity Requires Real-Time Solutions

    May 22, 2023
    embedded finance, ecommerce

    How Retailers Can Enter the World of Embedded Finance Confidently 

    May 19, 2023
    cross-border

    Cross-Border Trade is a Cinch with the Right Payments Partner

    May 18, 2023
    debit

    5 Reasons Merchants See Debit As
    Top-of-Mind for In-Store Sales

    May 17, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result