US House Committee passes bill to prevent issuance of CBDC, sparking controversy in the crypto industry

In a significant move that has ignited debates within the cryptocurrency space, the United States House Financial Services Committee has given its approval to a bill that seeks to prohibit the Federal Reserve from ever introducing a Central Bank Digital Currency (CBDC). The legislation, proposed by Republicans in the committee and endorsed by Rep. Patrick McHenry (R-N.C.), the committee's chairman, aims to ensure that any potential US CBDC must receive explicit authorisation from Congress. This move is touted as a measure to safeguard American citizens' privacy and the financial system from perceived risks associated with a CBDC.

Divided views on the bill's implications

The approval of this bill has sparked a divisive debate within the cryptocurrency community. Critics argue that it could hinder the United States' technological progress and global competitiveness, particularly in relation to China's rapid advancements in the CBDC space. Rep. Maxine Waters (D-Calif.), a prominent voice in this debate, accuses Republicans of taking an "anti-innovation stance" by stifling research and potentially preventing the United States from adopting faster, cheaper, and more efficient payment systems, even at the risk of losing the dollar's status as the world's reserve currency.

Regulatory chaos & industry exodus

This development occurs in the backdrop of ongoing regulatory challenges in the US cryptocurrency industry. Disputes over regulatory jurisdiction between the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) have created an atmosphere of uncertainty. As a result, several crypto companies, including industry giant Coinbase, have opted to relocate their operations outside the United States, seeking more conducive regulatory environments.

While the bill has cleared the House Financial Services Committee, it still faces uncertainty as it advances to the House of Representatives, where opposition in favor of fostering technological development and innovation could lead to modifications or even the rejection of the bill. The cryptocurrency industry remains on edge, eager to see how this legislative tug-of-war will shape the future of digital assets and central bank digital currencies in the United States.