On Friday, Congressman Alex X. Mooney (R-VA) introduced legislation to prevent a digital dollar, or Central Bank Digital Currency (CBDC) pilot program through the Federal Reserve. H.R. 3712, known as the Digital Dollar Pilot Prevention Act aims to close a loophole that the Federal Reserve is using in CBDC pilot projects, which drew attention last year for involving the private sector.
CBDC pilot projects are being conducted by other governments like China and Brazil, who announced Visa and Microsoft joined the endeavor earlier this week. China rolled out its most ambitious use of the digital yuan last month, paying public sector workers in the eastern city of Changshu with the digital currency, known as e-CNY. The digital yuan incorporates blockchain technology to create a traceable digital ledger and had already been trialed in the city of 1.7 million residents.
The Atlantic Council, a U.S. taxpayer-funded DC-based think tank focused on NATO policies, offers an online CBDC tracker showing 18 nations with pilot programs, mostly in Europe, Asia, North America, and the Middle East. The tracker also shows 32 nations in development, including the U.S., and 11 launched currencies, globally.
Congressional Republicans have maintained that the Federal Reserve lacks the statutory authority to issue a CBDC without Congressional approval, while the Fed has left ambiguity surrounding its position.