Search ForexCrunch
  • US Congressmen are anxious that digital currency will overpower the globe.  
  • They alluded to a number of pilot tests happening worldwide.

Two US Congressmen French Hill and Bill Foster have presented an open letter to Federal Reserve Chairman Jerome Powell expressing concern about the risk that the US dollar is facing. It also asks the central bank if they have considered creating its version of digital currency. They are anxious about traditional money losing its prominence and digital currency overpowering the globe.  

Since Facebook’s Libra has been trying hard to get approval from the regulators, the government is observing the need to launch a project that can scale instantly. A project that is border- friendly and onboard a built-in userbase of billions to send money around the globe with ease. Lawmakers are planning to come up with competitive products before becoming outdated.

The letter states:

“As you are aware, the nature of money is changing. While this is not a new phenomenon – one might recall the advancement of paper money in China in the 9th century from a coin-based system – more recent advancements could be described as an inflection point in the evolution of money and payments. As outlined in more detail below, the Federal Reserve, as the central bank of the United States, has the ability and the natural role to develop a national digital currency.”

The lawmakers cite the need for a US dollar digital currency “increasing imperative.” They alluded to a number of pilot tests worldwide, from the “e-krona” in Sweden to Uruguay’s “e-peso” and China’s central bank-backed digital currency that will likely be launched in 2020.  
 
They further added:

“While some Americans use cryptocurrency for speculative purposes, usage of digital assets may well increasingly align with that of paper money in the future.”

They also point the advancing threats from the private sector which are now well established.

“Relying on the private sector to develop digital currencies carries its own risks, including loss of control of monetary policy, as well as the ability to implement and enforce effective anti-money laundering and counter-terrorism financing (AML/CTF).

The Facebook/Libra proposal, if implemented, could remove important aspects of financial governance outside of U.S. jurisdiction. In the private sector, J.P. Morgan recently became the first U.S. bank to create and successfully test a digital coin representing a fiat currency. Additionally, next year, Wells Fargo plans to begin piloting Wells Fargo Digital Cash, which will be a cryptocurrency linked to the U.S. dollar.”