Lawmakers ask Fed about US Dollar Digital Currency

Members of the US Congress recommend the Fed to consider developing the US dollar digital currency.

October 3, 2019, | AtoZ Markets  A digital currency is a form of currency that only available in digital or electronic form and not in physical form. It is also called digital currency, electronic money, electronic money, or cybercash. Since it exists in many variations, digital currencies can be considered a superset of cryptocurrencies. Like any standard fiat currency, digital currencies can be used to purchase goods and pay for services. But they may find limited use among some online communities, such as gambling sites, gaming portals, hazards, or social networks.

Developing US Dollar Digital Currency

Two US lawmakers, the French Hill (R-Arkansas) and Bill Foster (D-Illinois), asked the Federal Reserve, the country’s central bank, to consider the development of the US dollar digital currency. A letter was sent to Fed Chairman Jerome Powell on Monday. Hill and Foster said “the nature of money is changing”, and the Fed has the natural ability and role in developing a national digital currency.

Members of Congress have highlighted concerns that the US dollar may be in “long-term danger” due to the wide adoption of digital fiat currencies. Citing a study by the Bank for International Settlements (BIS), they stated that over 40 countries have developed or are looking to create US dollar digital currency. The Chinese central bank, for example, is expected to launch a digital version of the yuan later this year or early 2020, they added. “With the possibility for digital currencies will further take on the characteristics and usefulness of paper money. It could become increasingly imperative that the Federal Reserve take up the project of developing a US dollar digital currency,” Congress members said.

Hill and Foster opinions for Libra coin

Hill and Foster also specifically mentioned the Libra stablecoin project led by Facebook. By saying that private companies are developing digital currencies have their risks, including the loss of control over monetary policy. They also mentioned the recent efforts of JP Morgan and Wells Fargo.

Hill and Foster are, therefore, seeking answers from Powell on a series of questions. That includes whether the Fed is currently exploring the development of the US dollar digital currency and whether there are plans for any increase in the traction of digital fiat currencies.

Last year, Sheila Bair, former president of the Federal Deposit Insurance Corporation (FDIC), also recommended the Fed to consider its digital currency seriously. Besides, the central bank has recently declared to “seriously consider” the possibility of proceeding with the launch of a network of instant payments to rival Wall Street’s major banks.

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