House Financial Services CBDC Markup Sends Emmer Bill To House Floor

CBDCs and the House Financial Services Committee

An ambitious markup of thirteen bills was on the docket for today’s markup by House Financial Services Committee led by Chair Patrick McHenry (R, NC) and Ranking Member Maxine Waters (D, CA).

The markup’s themes – led by the Republican majority but coordinated with Democrats – included protecting consumer privacy and preventing the overreach of government. There was also bipartisan legislation protecting United States’ national security interests particularly as it related to China.

Overall, most of the hearing’s tone was one of cooperation across the aisle and was reflected in unanimous passage of every bill not related to Central Bank Digital Currencies (CBDCs).

So, perhaps due to the expectation of extended debate, blockchain-related legislation containing various restrictions on a Central Bank Digital Currency (CBDC) were last on the Committee’s agenda.

With several CBDC bills to pursue, the Republican majority, led by Chair McHenry, apparently decided to solely pursue passage of H.R. 5403, the “CBDC Anti-Surveillance State Act” by Majority Whip Rep. Tom Emmer (R, MN). The bill bans the issuance of a CBDC (but the Fed can study it, as Republicans later emphasized).

See the post-hearing press release from the GOP.

tl;dr – the voting

The voting for H.R. 5403, the “CBDC Anti-Surveillance State Act” was approved along party lines with a vote of 27-20 which sends the bill to the House floor.

Ranking Member Waters and Rep. Stephen Lynch’s (D, MA) attempts to add amendments “softening” Rep. Emmer’s bill were both rejected along party lines in a votes of 27-20, as well.

Rep. Emmer announced the bills’ passage immediately after the hearing. Read it.

the CBDC markup

As the Central Bank Digital Currency (CBDC) portion of the markup arrived, it was clear that Democratic leadership wanted any digital currency associated with the U.S. Dollar in the hands of the Federal government.  The mostly-unspoken implications for private stablecoins was that Democratic leadership was opposed.

After Chair McHenry’s opening statement (read it), Ranking Member Waters made her statement which criticized the Republican anti-CBDC view.

Waters said, “Nobody fully understands the potential benefits and challenges of CBDCs or how their implementation could affect the preeminence of the US dollar and global finance more broadly. That is why the Biden administration and the Federal Reserve are researching this. However, the Republican bill before us today would stifle that research and prevent us from moving forward, even if it means that the dollar loses its status as the world’s reserve currency. And even if it means that US citizens lose out on faster, cheaper and simpler payments. I’m disappointed that Republicans have taken such a deeply anti-innovation stance.”

The “anti-innovation” accusation is an about-face to Democratic leadership’s positioning against the recent stablecoin and digital asset market structure bills which could be considered “pro-innovation.” Continue reading “House Financial Services CBDC Markup Sends Emmer Bill To House Floor”

CBDC Hearing Shows Diversity Of Opinion Among House Financial Services Democrats

CBDCs hearing

Today, the House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion convened a hearing titled, “Digital Dollar Dilemma: The Implications of a Central Bank Digital Currency and Private Sector Alternatives.” View the hearing page.  And, see the video.

Just before the hearing began, Rep. Stephen Lynch (D, MA), who is also the Ranking Member of the HFS Digital Assets Subcommittee, drew the battle lines with Republicans beginning with an announcement about the creation of the Digital Dollar Caucus, a list of whose membership is expected within a week according to a spokesperson. The Ranking Member also reintroduced H.R. 5410, “the Electronic Currency and Secure Hardware (ECASH) Act, which would develop an electronic version of the U.S. Dollar for use by the American public.” Co-sponsors include Democrats Rep. Ayanna Pressley (MA), Rep. Rashida Tlaib (MI) and Rep. Jesus Garcia (IL) – none of whom are on the Digital Assets Subcommittee. Read the press release.

Digging into the text of the bill, the ECASH Act asks U.S. Treasury “to develop and pilot digital dollar technologies that replicate the privacy-respecting features of physical cash.” See it.

FedNow, stablecoins, ECASH, CBDCs.. the lines are blurring.

Lynch’s legislation mingled with the hearing’s other bills which were skeptical of a CBDC, at best, including: Majority Whip Rep. Tom Emmer’s [H.R. 1122] “CBDC Anti-Surveillance State Act,” the bipartisan “Power of the Mint Act” [H.R. 3402] and the “Digital Dollar Prevention Act” [H.R. 3712] with 19 Republican co-sponsors. Continue reading “CBDC Hearing Shows Diversity Of Opinion Among House Financial Services Democrats”

The Fed Wants A Stablecoin Law From Congress

The Fed Wants A Stablecoin Law

Stablecoin legislation is on the minds of DC policymakers this fall as it remains among the lowest of the low-hanging legislative initiatives in crypto which could ultimately result in a law.

Given the widespread agreement on its need, the only question seems to be – is it this year or next?

As Congress began its return from recess last week, The U.S. Federal Reserve brought its lens to stablecoins. Fed Chair Jerome Powell and its new Vice Chair for Supervision, Michael S. Barr, participated in D.C. think tank events.

Mr. Barr presented at the Brookings Institution conference and provided a broad overview of his priorities which center on maintaining the stability of the U.S. banking system which seemingly puts him front-and-center in the stablecoin debate.

The Vice Chair position Barr now holds was originally established due to passage of the Dodd-Frank Act and addressed the need for a financial watchdog given the extreme risk-taking by banks that led to the Great Financial Crisis of 2008.

Prior to joining the Fed, Barr was in academia as dean of the University of Michigan. He’s also very familiar with crypto having served as an advisor in 2015 to Ripple Labs.


In his speech, Barr aligned himself with the urgent calls in favor of stablecoin rulemaking saying, “Stablecoins, like other unregulated private money, could pose financial stability risks. History shows that in the absence of appropriate regulation, private money is subject to destabilizing runs, financial instability, and the potential for widespread economic harm.”

Vice Chair Barr added that he believed Congress needs to work quickly on legislation that brings stablecoins “inside the prudential regulatory perimeter.”

Continue reading “The Fed Wants A Stablecoin Law From Congress”

Can Senator Toomey Get Stablecoin Legislation Passed Before He Leaves?

Senator Patrick Toomey

There’s an opening for the passage of stablecoin legislation this year.

No, really.

Even though crypto critiques rage and bankruptcies blare while crypto prices swirl around the drain, this is the moment for Senator Patrick Toomey (R, PA) to deliver a first-of-its-kind law on stablecoins before he leaves office in January.

Complicating matters, narratives have changed in the past several months:

    • Pre-“crypto winter” narrative: “Legislation is coming to help support innovation and grow the blockchain industry.”
    • “Crypto winter” narrative: “Legislation needs to save us from the contagion that blockchain technology could ignite in the financial system.”

Yet, with either narrative, there’s an acute need for stablecoin legislation.

And so the table is set for Senator Toomey, who could steward narrowly-defined legislation in an expedited process that builds on his Stablecoin TRUST Act. In fact, the Senator said 2022 passage was possible only a month ago when speaking at the Consensus conference in Austin:
Continue reading “Can Senator Toomey Get Stablecoin Legislation Passed Before He Leaves?”

Banque de France on the Central Bank CBDC and Privacy

Banque de France CBDC

Today’s presentation to the Blockchain NYC Meetup group reviewed the Banque de France‘s recent research on a Euro approach to a central bank digital currency (CBDC). Though still a couple of years away – at best – according to the Banque’s representatives, the central bank’s many moving parts offer opportunity with distributed ledger technology (DLT) and blockchain.

Where CBDC product development mixes with privacy was a topic in the Q&A section of the presentation.

Light editing for clarity…

Jamiel Sheikh, Blockchain NYC meetup moderator

[A question from a professor], and this may be applicable to retail CBDC, how will Bank of France design of CBDC affect consumer privacy? How [do you] address the trade off between protecting consumer privacy and mitigating risks to financial integrity?

Adeline Bachellerie, Head of Digital Currency and Innovation, Banque de France

Your quick question if I understand right is about retail CBDC here. So yes, as you know, we are working within Euro system on the Investigation Phase for [muffled, perhaps “exterior”] which could be Central Bank digital money for retail purposes. So, we do that work in this investigation phase on CBDC for wholesale purposes.

Continue reading “Banque de France on the Central Bank CBDC and Privacy”