A bipartisan group of members of Congress is pushing for faster action on a digital dollar.
Rep. Maxine Waters (D-Calif.) and Rep. French Hill (R-Ark.) are among the House of Representatives members who introduced a bill that would compel the Federal Reserve to speed up work on a U.S. central bank digital currency (CBDC).
Read more: Lawmakers Ask Fed to Speed up CBDC Project
Waters chairs the House Financial Services Committee, which means the bill will certainly get a hearing without getting bogged down. It will instruct the Fed to speed up its study of a digital dollar and begin building a process by which one can be created and launched.
While the U.S. Federal Reserve Chairman Jerome Powell has shifted from skeptical to unhurried in the past few years, the Fed just wrapped a public comment period on its January report, Money and Payments: The U.S. Dollar in the Age of Digital Transformation. The comments were overwhelmingly negative, led by U.S. bank lobbying groups, which fear they will be cut out and lose access to depositors’ funds.
Having called CBDCs “a new digital assets space race,” in the past, Waters has said she believes that “with countries around the world competing to deploy digital versions of their own currencies, and America can’t be left behind.”
Most notably, China is far ahead of all other major economies, with a digital yuan, the e-CNY, almost ready to launch. Virtually all others are years away. More than a few supporters, in and out of Congress, fear that China in particular will be able to use its CBDC to challenge the dollar’s position as the world’s reserve currency.
RBA Says G’Day to CBDC
The Reserve Bank of Australia (RBA) along with the country’s Treasury and other agencies have announced plans to begin research on issuing a CBDC.
The RBA will be working primarily with the Digital Finance Cooperative Research Centre (DFCRC), a public-private research partnership studying the broader digitization of assets, with the Treasury Department represented on the study’s steering committee.
It “will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment for a period of time and is intended to involve a pilot CBDC that is a real claim on the Reserve Bank,” the RBA said in its Aug. 9 release.
“A question that has received less attention to date, especially in countries like Australia that already have relatively modern and well-functioning payment and settlement systems, is the use cases for a CBDC and the potential economic benefits of introducing one,” the RBA said
It also invited industry participants to develop potential use cases for a CBDC that can be tested as part of the project.
Russia Pushing CBDC
The Bank of Russia has announced plans to start connecting local banks and other institutions to a digital ruble to begin testing a forthcoming CBDC by 2024, Cointelegraph reported.
The central bank believes it will be running trials with “real money” transactions directly between individuals, as well as between consumers and businesses.
Capability for offline transactions is expected by 2025, as well as the “integration of non-bank financial intermediaries, financial platforms and exchange infrastructure,” Cointelegraph added.
The Bank of Russia added that the “phased process of introducing the digital ruble will provide market participants with the opportunity to adapt to new conditions.”
It also plans to begin carrying out cross-border and foreign exchange capacities in partnership with other central banks developing CBDCs.
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