US lawmakers strive to avoid surveillance with the digital dollar, unlike China according to members of Congress so let’s find out more in today’s cryptocurrency news today.
US lawmakers strive for a better regulatory climate for crypto with republicans especially being worried about the digital dollar being used for surveillance, similarly to what the Digital Yuan serves in China. The lawmakers spoke about the benefits of the central bank’s digital currency but the conservatives expressed concerns over how it could turn the country into a surveillance state. The politicians quizzed experts on how the digital dollar in the states would work during their meeting with the National Security Subcommittee, International Development, and Monetary policy team.
A CBDC is a digital version of a fiat currency like the US dollar or the British pound and it is backed by a central bank and therefore controlled by the government. Countries around the world are in a different stage of researching this technology but some like China are ahead of the game and already have the project developed. The US is still researching the benefits of the CBDC and said that it is no rush to release one yet. During the meeting titled “The Promises and perils of central bank digital currencies,” the point was reiterated as the lawmakers said that they mustn’t rush the process. Republican Congressman Andy Barr said that getting it right is more important than doing it fast and also said that the US would have to observe China closely as it could use its digital yuan to expand domestic surveillance initiatives.
Congressman Patrick McHenry agreed and said that the US could have to fight with privacy rights and civil liberties which is something that the Chinese don’t care about when developing a CBDC. While Tom Emmer said that a CBDC can be beneficial if it was open, permissionless, and private. Some CBDCs employ a blockchain which is the technology behind cryptocurrencies like BTC. The networks differ from the ones that power permissionless cryptos like BTC or ETH since CBDCs are controlled by a central bank:
“Any attempt to craft a CBDC that enables the Fed to provide retail bank accounts and mobilizes the CBDC into a surveillance tool able to collect all sorts of information on Americans would do nothing other than put the U.S. on par with China’s digital authoritarianism.”
Yaya Fanusie senior fellow of the Energy, Economics, and Security Program said that the rules around data privacy will be needed if the US launches its own digital dollar. The FED will release a digital dollar whitepaper later this year hoping to improve financial inclusion for the unbanked population in the US.