On September 14, the US House of Representatives subcommittee convened a hearing to delve into the "digital dollar dilemma," and within the chambers of Congress, dissenting voices emerged. Five expert witnesses were scheduled to testify at this hearing, with a majority expressing opposition to the creation of a US central bank digital currency (CBDC), or digital dollar.
The partisan split was evident from the outset of the hearing, with subcommittee chairman French Hill asserting that "no one in Congress supports a CBDC except on the fringes." Representative Tom Emmer went further, labeling CBDC as "a tool owned by the Communist Party ."
Stephen Lynch, ranking member of the subcommittee, cautioned against "false narratives and fear-mongering, much of it coming from the cryptocurrency industry itself." He also announced the establishment of the Congressional Digital Dollar Caucus.
The five witnesses slated to speak at the hearing, held before the Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion, include Yuval Rooz, CEO of Digital Assets; Paige Paridon, Senior Vice President at the Bank Policy Institute; Christina Parajon Skinner from the University of Pennsylvania; Norbert Michel representing the Cato Institute, and Raul Carrillo, a lecturer at Columbia University. The hearing's primary focus was on discussing private sector alternatives to a CBDC, with Rooz being the only witness directly connected to such a business.
Digital Asset, creator of the Daml smart contract language and the Canton blockchain, presented the CBDC perspective and stressed that any digital dollar should respect Fourth Amendment privacy rights while leveraging existing private sector technology.
Paridon, in her testimony, countered arguments made by digital dollar proponents and raised potential issues within the banking system. She concluded that "a CBDC could disrupt the US commercial banking system and severely limit the supply of credit to the economy."
Skinner provided historical context for CBDC, dating back to the founders' intentions. She argued that introducing a CBDC could potentially curtail individual economic freedom by providing the state with more tools for command-and-control public policies.
The Cato Institute, known for its opposition to CBDC, had Michel address technical and political issues, asserting that a US CBDC would offer no real benefit. Carrillo voiced support for digital dollar technology but opposed CBDC specifically, objecting to centralizing responsibilities at the Federal Reserve .
Carrillo's key concern was the assumption of widespread financial surveillance, which he considered profoundly mistaken. He advocated for digital dollar pilot projects and steady innovation efforts to construct a secure and reliable financial system. The Federal Reserve's stance, "No CBDC without congressional authorization," was reiterated, with several bills under consideration. Emmer, who introduced the CBDC Counter-Surveillance State Act, criticized the Boston Fed study and questioned the need for a CBDC.
Lastly, the President's Executive Order on Digital Assets mandates CBDC research, and the Digital Dollar Project, a think tank co-founded by former US Commodity Futures Trading Commission Chairman Christopher Giancarlo, has been instrumental in CBDC research.
