A group of Republican lawmakers is asking the U.S. Department of Justice (DOJ) to weigh in on the Federal Reserve’s proposed creation of a central bank digital currency (CBDC).
In a letter dated Wednesday (Oct. 5), 11 GOP members of the House Committee on Financial Services asked Attorney General Merrick Garland for a copy of the Department’s “assessment of whether legislative changes would be necessary to issue a CBDC,” as required by a recent executive order from the President Joe Biden administration.
The representatives said they appreciate the efforts to examine the impact a CBDC will have on the Fed and the country’s payment systems.
“However, the appropriate place for the discussion on whether authorizing legislation is necessary is in the legislative branch,” the letter stated. “As you know, Congress’ authority over coining money is exclusive. The Supreme Court has recognized Congress’ power to coin money and regulate the value thereof, confirming Congress’ authority to regulate each phase of currency.”
The representatives also said the Republican members of the committee have concluded that the Fed does not have the authority to issue a CBDC without action from Congress. They asked Garland to respond to their request by Oct. 15.
This is the second time in less than a month that Republicans on the House Committee on Financial Services have sought more details about a CBDC.
In September, two dozen members of the committee wrote Fed Vice Chair Lael Brainard and outlined a series of issues the GOP has been noting since the questions of a digital dollar and the need for a regulatory framework for cryptocurrency hit D.C.
As PYMNTS reported, the first two are protecting “the use of digital assets and other private-sector innovative payment methods” — such as increasingly controversial stablecoins — and keeping banks from being cut off from their customers and the deposits they bring.
The third is whether her pledge that the Fed would not “move ahead” on a CBDC without “support” from Congress and the executive branch refers to a law explicitly authorizing one.
Source : PYMNTS