Representative Patrick McHenry, ranking Republican on the House Financial Services Committee, along with Representative French Hill and members of the Republican Digital Asset Working Group, have sent a letter to the US Department of Justice requesting an assessment on whether or not legislation is needed for a government-issued Central Bank Digital Currency (CBDC).
Currently, multiple members of Congress are working on stablecoin legislation which will impact CBDCs. Meanwhile, the US Federal Reserve is researching the pros and cons of a CBDC and the US Department of Treasury is also engaged in the process. The Biden Administration recently signed an Executive Order addressing the emerging digital asset ecosystem including stablecoins and CBDCs but as of today, no final decisions have been reached on digital currency.
The Digital Asset Working Group members distributed the following statement addressed to AG Merrick Garland:
“We write regarding the Department of Justice’s (Department) role in recent reports issued pursuant to the Executive Order on Ensuring Responsible Development in Digital Assets and to request a copy of the Department’s “assessment of whether legislative changes would be necessary to issue a CBDC” as required by the Executive Order.“[T]he appropriate place for the discussion on whether authorizing legislation is necessary, is in the legislative branch… Both Federal Reserve Chairman Powell and Vice Chair Lael Brainard have also testified on the need for authorizing legislation.”
“We request that you provide your assessment and any corresponding legislative proposal to the Committee no later than October 15, 2022.”
Clearly, Republicans believe that the Federal Reserve does not have the legal authority to issue a CBDC absent action from Congress.
If the Republicans flip the House in the midterms, you can anticipate more legislation addressing questions impacting digital assets as well as digital currency including CBDCs.