Senate bill would bar Fed from issuing CBDC

Sen. Mike Lee (R-Utah) introduced legislation to prohibit the Federal Reserve from issuing a central bank digital currency.

New Bill: The No CBDC Act would bar the Fed or any other agency from implementing a direct-to-consumer or intermediated CBDC model. Lee said a U.S. CBDC would centralize the government’s control over the economy, pose risks to consumer privacy and liberty, and convert banks to wallets instead of private lending institutions.

Bill Developments: The House Financial Services Committee is deliberating legislation on stablecoins, with congressional authorization of a U.S. CBDC among the provisions under consideration. The committee decided not to consider the stablecoin bill at a July markup after ICBA expressed concerns that it was not publicly vetted, as reported by The Wall Street Journal, Politico, and Reuters.

ICBA Position: In recent comment letters to the Treasury and Commerce departments, ICBA said Congress should not authorize the creation of a U.S. CBDC, citing the risks of a digital dollar to existing banking and payments systems.