In a Sept. 30 letter to Federal Reserve Board Chairman Jerome Powell, U.S. Representatives French Hill and Bill Foster expressed concerns that the importance of the U.S. dollar could be in jeopardy “from wide adoption of digital fiat currencies.”
Members of the United States House of Representatives Financial Services Committee asked the Federal Reserve whether there are any plans of launching a U.S. dollar digital currency.
The lawmakers stated that, due to the potential of digital currencies to take on the characteristics and utility of paper money, it may be increasingly urgent for the Fed to “take up the project of developing a U.S. dollar digital currency.”
Fed has the mandate to develop a national digital currency
They stated:
“Internationally, the Bank for International Settlements conducted a study that found that over 40 countries around the world have currently developed or are looking into developing a digital currency.”
The two congressmen noted that the Federal Reserve has the ability and the mandate to establish a safer, more flexible and more stable monetary and financial system by developing a digital national currency.
Central banks unlikely to coordinate
Cointelegraph previously reported that former Federal Reserve official Simon Potter said that proposals to end the U.S. dollar’s dominance by replacing it with a digital currency makes no sense.
He added:
“I see no argument that makes sense to have something that complicated out there when you have large, liquid capital markets in the U.S. Not having one currency that you can basically price things and have a deep market in, that makes life much harder for the global economy.”
Potter added that while it is unlikely for central banks to “ever coordinate around a virtual currency”, private companies might. Central banks should be very concerned about the private sector doing this, he said.
US House Committee Pressuring Zuckerberg to Testify on Libra
Facebook CEO Mark Zuckerberg is facing pressure to testify before U.S. lawmakers on the firm’s cryptocurrency project Libra.
According to a report from The Information on Friday, Sheryle Sandberg, chief operating officer of the social media giant, was invited to testify before the U.S. House of Representatives Financial Services Committee on October 29 concerning the new payment network.
However, the body will not finalize the hearing until Zuckerberg also agrees to testify before January 2020, the news source claims.
Libra – a stablecoin backed by a reserve of fiat currencies and government bonds – is slated for launch in the second half of next year, though Zuckerberg recently appeared to cast a little doubt on that timeline in an interview.
Announced in June, the crypto payments initiative is being developed by an independent non-profit association based in Switzerland.
Sandberg joins David Marcus, Libra co-creator and head of Calibra – the entity building a wallet app for Libra – as the second Facebook representative to sit before the U.S. House committee to face questions on how the cryptocurrency scheme will be structured.
Rep. Maxine Waters (D-CA), chair of the Financial Services Committee, has been one of the most vocal critics of Facebook’s payment network to date, calling on Facebook to shut down the project until further regulatory review.
Earlier this week, The Verge published leaked audio transcripts from an internal Facebook meeting concerning Libra, among other company issues. In the dialogue, Zuckerberg said Libra continues to meet public scrutiny, but is facing less resistance behind closed doors.
