Congress to have hearing about digital dollar tomorrow

Congress begins to strongly consider the use of a digital dollar given the situation arising from the pandemic and the US' economic war with China.

By · Jul 22, 2020 . 5min read

The US Senate Banking Subcommittee on Economic Policy is due to have a meeting about digital currencies tomorrow. The meeting will revolve around how the US can benefit from the use of a central bank digital currency (CBDC) in its battle for economic supremacy with the Chinese.

Republican senator Tom Cotton will chair the meeting. It will be the third such meeting that addresses digital currencies. The other two meetings took place in the context of COVID-19. They discussed the role of technology in delivering stimulus checks to those in need, amongst other things.

China has announced that it will launch its digital renminbi after years of research. The Chinese will introduce their currency in 4 provinces. They will also use it during the 2022 Beijing Olympics. The US and China are the two largest economic powers in the world right now. The US feels it needs to get ahead of the curve since China leading ahead on virtual currency front.

Interview with Giancarlo

The Forbes magazine conducted an interview with J. Chris Giancarlo. He is part of the group that is set to testify in front of Congress tomorrow. He was first asked about the level of interest that Congress is showing in a digital dollar. Giancarlo stated that there is definite bipartisan interest and the meetings are moving along positively.

He then spoke about how Congress is beginning to understand the importance of a CBDC in foreign policy matters. He stated that a dollar-CBDC would only enhance the dollar’s position as the global medium of exchange.

Forbes mentioned the comments made by Fed Chairman Jerome Powell to Giancarlo. Powell was unsure whether the Fed even had the constitutional authority to create a digital dollar. He was also wary of the fact that the public may not trust a digital dollar if the private sector were to have a stake in it.

Giancarlo responded by stating that the rest of the world is heading in the direction of CBDC’s. It is up to the US to decide whether it wants to be a part of that or fall behind. He also said that the private sector would be essential in the development of a digital dollar and referred to the private sector’s involvement in some of the US’ most significant achievements such as the moon landing and the foundation of the internet.

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