On Tuesday, the US House Committee conducted a hearing on Financial Services, which saw five speakers vote in favor of the development of some kind of CBDC, or stablecoin in the US.
These speakers said that a central bank digital currency (CBDC), or stablecoin should be developed in order to compete against China, given the progress it has made in developing its digital currency.
CBDCs refer to the digital version of the fiat currency of a country and also exist on blockchain networks, but they are regulated and centralized by the issuing country.
The hearing was hosted by the US House Subcommittee on National Security, Monetary Policy, and International Development.
The focus of the hearing was to talk about the alternative payment methods available and the impact they can have on national security.
Michael San Nicolas, Guam House Representative, called on the panel of witnesses for a vote to gauge the need for the US government to develop some kind of CBDC or digital currency.
All of the five speakers were in agreement that there was indeed a need to do so.
The witness panel
The three witnesses who were on the panel that was focused on economic security and technology were Dr. Carla Norrlof, the Atlantic Council nonresident senior fellow, Emily Jin, a research assistant for the Center for a New American Security and Scott Dueweke, a Wilson Center Fellow.
Other people also on the witness panel included Jonathan Levin, the Chief Strategy Officer and co-founder of Chainalysis and Ari Redbord, the head of government and legal affairs at TRM Labs.
However, it should be noted that just because the panel unanimously voted in favor of it does not mean that a US central bank digital currency (CBDC) may be developed.
The vote was aimed at clarifying the position of the panel and the only takeaway of the hearing is that there is a possibility of a CBDC, but things are still uncertain.
It was only a few months ago that Jerome Powell, the chairman of the US Federal Reserve, stated that developing a CBDC would be an important innovation and that they need to explore it.
According to the committee, the United States should consider the idea of developing a CBDC because of international sanctions and to protect the dominance and value of the US dollar.
Moreover, they also said that it can also be helpful in mitigating national security.
French Hill, the Republic Congressman from Arkansas, said that the government needs to take measures for ensuring the US dollar remains the world’s reserve currency.
Hill said that they need to ensure that the US dollar remains competitive in the 21st century. Jake Auchincloss, the Democratic Representative from Massachusetts, praised the hearing.
This was because of the progress they had made in terms of bipartisan regulation of stablecoins, indicating that CBDCs may be a topic that both sides can actually agree on with midterm elections drawing nearer.