US Digital Currency a ‘Unanimous Need’ to Compete With China: House Committee

[Chilwell]

All invited speakers agreed that the United States must launch a digital currency to remain globally competitive.


Five speakers at a hearing for the U.S. House Committee on Financial Services voted in favor of the U.S. developing some kind of national stablecoin or CBDC on Tuesday, citing competition from China’s progress on its digital currency.

CBDC is an acronym for Central Bank Digital Currency, which is a digital version of a country’s fiat currency. CBDCs typically exist on blockchain networks but are centralized and regulated by the issuing country.


The U.S. House Subcommittee on National Security, International Development and Monetary Policy hosted the hearing today, titled “Under the Radar: Alternative Payment Systems and the National Security Impacts of Their Growth.”


Guam House Representative Michael San Nicolas called for an “on-the-record” vote among the panel of witnesses in an effort to gauge the level of necessity for the U.S. government to establish some kind of digital currency like a CBDC.
All five speakers agreed that there was a “unanimous need.”

Wilson Center Fellow Scott Dueweke, Center for a New American Security Research Assistant Emily Jin, and Atlantic Counsel Nonresident Senior Fellow Dr. Carla Norrlof were three witnesses on the panel focused on technology and economic security.

TRM Labs Head of Legal and Government Affairs Ari Redbord and Chainalysis Co-founder and Chief Strategy Officer Jonathan Levin were also on the witness panel.



https://decrypt.co/110197/us-digital-currency-a-unanimous-need-to-compete-with-china-house-committee

[Jody.Drummer]

Everything becomes one unit where in the end the government just wants to make all digital assets centralized. Due to the fact that they issue guidelines to ensure fair asset transactions. Even then, they firmly involved the SEC even with an official letter launched on May 3, 2022 so that the SEC was more aggressive and acted quickly in dealing with digital assets that are currently rife in the US. Based on what I've read nearly 16% of American adults have purchased fluctuating digital assets. The U.S. Securities and Exchange Commission quoted the U.S. Securities and Exchange Commission as saying: The U.S. has the largest capital market because investors have confidence in it, and as more investors access crypto markets, it becomes increasingly important to dedicate more resources to protecting them,” said SEC Chairman Gary Gensler. “The Crypto Assets Division and Cyber ​​Enforcement Unit have successfully brought dozens of cases against those seeking to take advantage of investors in the crypto market. By nearly doubling the size of this key unit, the SEC will be better equipped to keep an eye on cryptocurrencies. markets while continuing to identify disclosure and control issues with respect to cybersecurity." (https://www.sec.gov/news/press-release/2022-78)

Then the proposals that will be considered by US financial executives are as follows:

• Monitor the usage, growth and connectivity of this alternative payment line with the rest of the world.
• The mandate of the US government's annual report on the use of the dollar in the context of the global payment system.
• Improve US cross-border payment lines to make dollar transactions more efficient.
• Develop economic measures to limit the progress of alternative payment lines.
• Strengthening expertise in analyzing financial and state governance developments.
• A draft long-term strategy document (updated every two to four years) to signal the direction of US financial governance and the government's thinking for the future of the dollar.
• Proactively engage in standard-setting bodies for digital assets and financial pathways.

(https://www.cnas.org/publications/congressional-testimony/under-the-radar).

[Hydrogen]

Everyone seems to know what a CBDC is.

The question remains, what will central banks like the federal reserve do to incentivize CBDC adoption. Are there steps they can take to make CBDC attractive inflation protected assets? Would that be a concern for them?

If I had $1 billion dollars in liquidity. With an option of storing my $1 B in CBDC, gold, stocks, bonds, commodities or bitcoin. Which option would be the most attractive in this day and age considering concerns revolving around inflation and recession.

The blueprint for central banks around the world appears to be a two step plan where they roll out CBDC and everyone simply embraces it. There lack the steps inbetween to make it a reality. To further complicate matters rolling electrical blackouts in states like california and texas are becoming normalized and routine. Which would appear to diminish the credibility factor of CBDCs in regions where electrical and internet usage are not reliable.

Around 5 years ago, there was a rumor that the chinese yuan could be exchanged for gold to accelerate its mass adoption. That could be a good direction for CBDCs in the future. Although I doubt it will happen.

CBDCs have considerable competition in the form of 3rd party payment apps, card and wallet services. There is also a question of how rapidly CBDC could be developed and deployed in real world scenarios. Venezuela announced its own CBDC called the petro back in 2018. 4 years later we still have not seen the petro rolled out in any capacity that matters. It is possible that CBDC may never materialize into more than a concept. There certainly hasn't been much activity or commitment from central banks which suggests serious development is taking place. No pilot tests. No proof of concept. No announcements of hardware or infrastructure being acquired. There hasn't been anything substantial on CBDCs that I remember seeing.

[EarnOnVictor]

The CBDC (Central Bank Digital Currency) is indeed not new, except that many central banks have not adopted it. However, they do not have a choice, it is a matter of time in this fast revolutionizing world.

The US hierarchy is known to be the first adopter of new inventions/innovations but in this case, they are being extremely careful in weighing the benefits and the risks the digital currency would cause. This is for the domestic financial institutions, payment systems (companies), and the security of the country and the world at large.

This adoption is non-negotiable to them but could only take more time. Nonetheless, China and any other countries in the world are not a threat to the US in this regard because the USD has been the only dependable safe-haven currency in the whole world.

[avikz]

Lol! The world used to follow US earlier and now the US is following China! That's strange!

CBDC is the future of mainstream economies without a doubt. It gives manifold benefits to the government in terms of surveillance. If US is trying to implement such things, I am sure we are going to see agitation from the common people because democracy still exists in US unlike China.

CBDC takes away all your financial privacy. Every single thing will be tracked related to your finances with CBDC. Think twice before supporting such initiatives.

[fiulpro]

Launching a digital currency to remain in the competition?
I don't think that's how it will work, you must understand that you have to somehow first identify these currencies " worth ", the digital currencies by the government does not work wonders and they are nothing but fiat and thus people don't want to invest as well, ofcourse they are very easy to manipulate as well thus there would be banks and whales investing in it.

But what they can do is make something like usdt, but better so that the price stays stable for years to come ad people can use it for trading, that's the best possible option here.

I do think they are ofc going to follow other countries but they must be careful.

[Gyfts]

The question remains, what will central banks like the federal reserve do to incentivize CBDC adoption. Are there steps they can take to make CBDC attractive inflation protected assets? Would that be a concern for them?

If I had $1 billion dollars in liquidity. With an option of storing my $1 B in CBDC, gold, stocks, bonds, commodities or bitcoin. Which option would be the most attractive in this day and age considering concerns revolving around inflation and recession.

A CBDC that's pegged to an actual asset to prevent creation of new currency would never work because it defeats the purpose of why these banks want to create the currency in the first place. I don't know if there's any benefit for a country with, what they believe to be, a strong currency to create their own stablecoin. It would delegitimize their pre-existing currency by having two currencies in the same country compete with each other. It'd create economic instability if everyday consumers began to fragment. If the U.S. was interested in creating a stablecoin, I think they'd make their intentions more clear. Their intentions for now is just digitalizing USD so it allows them more control over people's finances. It becomes easier to account for versus paper cash.

[dothebeats]

I don't think a lot of politicians in the US are actually studying what they propose. Launching CBDCs just because your rival country did it isn't a sound idea, at least from a citizen's standpoint. They can digitize the dollar and maybe that's it, and it's no different than the fiat that people are already using except that it exists digitally and that it's easier to manipulate according to what the economy needs. The US government will be investing huge sums of money in a somewhat futile effort since there isn't really a need for them to match what China is doing. Digital Yuan isn't even accepted by the citizens even if it's being pushed to them by the government

[Fortify]

All invited speakers agreed that the United States must launch a digital currency to remain globally competitive.

Five speakers at a hearing for the U.S. House Committee on Financial Services voted in favor of the U.S. developing some kind of national stablecoin or CBDC on Tuesday, citing competition from China’s progress on its digital currency.
CBDC is an acronym for Central Bank Digital Currency, which is a digital version of a country’s fiat currency. CBDCs typically exist on blockchain networks but are centralized and regulated by the issuing country.

The U.S. House Subcommittee on National Security, International Development and Monetary Policy hosted the hearing today, titled “Under the Radar: Alternative Payment Systems and the National Security Impacts of Their Growth.”

Guam House Representative Michael San Nicolas called for an “on-the-record” vote among the panel of witnesses in an effort to gauge the level of necessity for the U.S. government to establish some kind of digital currency like a CBDC.
All five speakers agreed that there was a “unanimous need.”

Wilson Center Fellow Scott Dueweke, Center for a New American Security Research Assistant Emily Jin, and Atlantic Counsel Nonresident Senior Fellow Dr. Carla Norrlof were three witnesses on the panel focused on technology and economic security.

TRM Labs Head of Legal and Government Affairs Ari Redbord and Chainalysis Co-founder and Chief Strategy Officer Jonathan Levin were also on the witness panel.

You have to wonder if blockchain technology can cope efficiently with the vast amount of transactions that are required if it was ultimately to take over from paper based currency. Whatever solution is determined in the end needs to be more efficient than current payment networks like Visa or Paypal, otherwise what is the point when it could just be outsourced to a third party? The transparency of the blockchain is the major bonus to take away from all this and should be used to champion any possible disadvantages - the fact that you have a collection of all transactions means that no counterfeits can creep into the system and it's also decentralized so it won't suffer from single points of failure.

[South Park]

Lol! The world used to follow US earlier and now the US is following China! That's strange!

CBDC is the future of mainstream economies without a doubt. It gives manifold benefits to the government in terms of surveillance. If US is trying to implement such things, I am sure we are going to see agitation from the common people because democracy still exists in US unlike China.

CBDC takes away all your financial privacy. Every single thing will be tracked related to your finances with CBDC. Think twice before supporting such initiatives.

For some reason governments still believe they have some incredible credibility among their population, when Roosevelt confiscated the gold out of their citizens on 1933 it is reported that only half of the US citizens did comply, the other half kept their gold, which at the end proved to be the right move, and this was back then when people had more confidence on their government, but if such a thing was done now how many people will comply? 10%? So the US government seems to believe that if they just create their own CBDC people will use it, and they could not be more wrong about that.