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US Republican party asks Fed vice chair to clear her stance on US CBDC

On September 8, Republicans from the U.S. House Committee on Financial Services requested Federal Reserve vice chair Lael Brainard to explain her stance on a CBDC before the deadlines set by United States President Joe Biden’s leader request on digital assets.

In a September 7 letter addressing Brainard, 24 Republican lawmakers along with lead member Patrick McHenry demanded the Fed vice chair Brainard to give replies concerning whether the national bank tried to “shorten the utilization of digital assets and other private sector innovative payment methods” by introducing a digital dollar.  

Moreover, they also asked regarding what Congress’ part might be in passing regulation in favour of a U.S. CBDC.

In May, Brainard addressed the panel on the advantages and risks of a digital dollar, proposing at the time that putting limits on CBDC holdings and not providing interest on accounts with digital dollars could assist with protecting the job of credit associations and maintaining certain parts of conventional banking. 

The members of the Republican House requested an explanation on whether the Fed might be thinking about an “intermediated model” for a digital dollar that could require “direct approval from Congress” to lay out, as well as what part the White House could play.

“Please explain what ‘strong support’ from the executive branch looks like? Is it as a letter or Executive Order?”

Both legislators and controllers have expressed worries about the FED presenting a CBDC. Jerome Powell, Fed chairman earlier recommended that despite nations like China pushing ahead with its digital yuan, the U.S. was in no rush in introducing a digital dollar. 

Connecticut executive Jim Himes delivered a white paper in June proposing Congress “start the process of considering and consequently approving regulation for the issuance of a U.S. CBDC.”

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