US lawmakers discuss digital assets and the House gets a new Speaker

October 25, 2023 Coin Telegraph

With the election of Mike Johnson as speaker of the U.S. House of Representatives, Congress will once again be able to move forward on crypto bills.

Members of the United States House of Representatives have chosen Mike Johnson to be the body’s next speaker — the second in line to the U.S. presidency and a very powerful figure in Congress.

In an Oct. 25 vote, all 220 Republicans present in the House voted for Johnson, while 209 Democrats cast ballots for Representative Hakeem Jeffries. The vote marked the first time in more than three weeks that the government body had clearly defined leadership. Representative Patrick McHenry had been acting as temporary speaker since Oct. 3 following a vote casting out former speaker Kevin McCarthy.

Unlike other candidates considered for speaker, Representative Johnson’s views on crypto were largely unknown. Many in the space had been hopeful that Representative Tom Emmer — a local advocate for digital assets in Congress — would win the gavel. However, his campaign lasted only a few hours following a statement from former U.S. President Donald Trump urging far-right Republicans not to support him.

According to @coinbase, the new candidate for Speaker of the House @RepMikeJohnson’s sentiment towards crypto is “Unclear” because he hasn’t yet made any statements about it. pic.twitter.com/5CEKjNkctr
— yuga.eth (@yugacohler) October 25, 2023

While McHenry was likely preoccupied with preparing for the House vote, Financial Services Committee vice chair French Hill led a subcommittee hearing on ‘Modernizing Financial Services Through Innovation and Competition.’ The hearing focused on discussions around crypto-related legislation, including the Financial Services Innovation Act and Examining Consumer Choice in Digital Payments Act.

With the swearing-in of Speaker Johnson, the House of Representatives can once again bring legislation to the floor for votes. Lawmakers previously passed bills out of committee, including the Financial Innovation and Technology for the 21st Century Act, the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act and the Keep Your Coins Act. However, the House may need to move on a new spending bill before Nov. 17 to address a potential government shutdown.

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Pro-crypto lawmaker Tom Emmer ends hours-long speaker campaign: Report

October 24, 2023 Coin Telegraph

Coin Telegraph

The Minnesota congressman was one of only a few crypto proponents in Congress being considered as a possible speaker of the House by Republican lawmakers.

Tom Emmer, the current majority whip and a crypto proponent, has reportedly dropped his bid to become the next speaker of the United States House of Representatives — a position second in line to the U.S. presidency.

According to multiple reports from major news outlets on Oct. 24, Representative Emmer ended his campaign for speaker after he was unable to secure the 217 Republican votes necessary to win on the House floor, a vote that had been expected sometime in the next day or two. The Minnesota congressman had only won the Republican nomination for speaker early on Oct. 24, making the race for the position open to a number of candidates once again.

Representative Emmer was the third candidate for speaker to drop his bid following a lack of Republican support. Following U.S. lawmakers in the House voting to remove former speaker Kevin McCarthy on Oct. 3, Representatives Jim Jordan and Steve Scalise have both attempted to drum up enough votes to win the speakership, but ultimately failed. Representative Patrick McHenry has been acting as interim speaker.

Emmer, a crypto proponent well known by many in the space, has spoken about financial privacy concerns regarding central bank digital currencies (CBDCs) and the non-partisan nature of regulating digital assets. Cointelegraph reached out to Emmer’s office following his nomination but did not receive a response at the time of publication.

Following Emmer’s nomination by Republicans, former U.S. President Donald Trump told his Truth Social followers that supporting the Minnesota congressman would be a “tragic mistake”. The former president’s message followed Emmer expressing his desire to continue a “strong working relationship” with Trump should he win the speakership.

At the time of publication, it was unclear who the Republicans planned to nominate next for speaker. Since Oct. 3, the House of Representatives has been legislatively paralyzed on crypto bills passed by the Financial Services Committee, including the Financial Innovation and Technology for the 21st Century Act, the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act and the Keep Your Coins Act.

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US Congress remains legislatively paralyzed on crypto bills without a House speaker

October 23, 2023 Coin Telegraph

Coin Telegraph

Pieces of legislation aimed at establishing clarity on certain crypto policies are unable to move forward with half of the legislative branch of the U.S. government lacking leadership.

No piece of legislation — crypto-related or otherwise — has largely been able to move through the United States Congress since Oct. 3, when lawmakers voted to oust then-Speaker of the House of Representatives Kevin McCarthy. This marks the first time in U.S. history that the legislative body has been without elected leadership, with no definitive plan to fill the slot.

At the time of publication, there are several candidates in the running for the third most powerful role in the U.S. government, but it’s unclear if any of them have enough support from Republican lawmakers — the political party currently holding the majority of seats in the House — to win. Following Speaker McCarthy, Representative Steve Scalise won a majority of Republican votes in a closed-door session, but he later dropped out, leaving the door open for Representative Jim Jordan to attempt a run.

Jordan went through three rounds of voting — losing more support from his Republican colleagues with each round — before the party voted him out as their nominee in a closed-door meeting. This effectively means the speaker’s position is open to anyone, Democrat or Republican, with no clear path forward. All Democrats present for the three rounds voted unanimously for Representative Hakeem Jeffries, the House minority leader.

Patrick McHenry, chair of the House Financial Services Committee and interim speaker following McCarthy’s ousting, may be a candidate for the full-time role. Preoccupied with his duties as temporary Speaker, McHenry could see Representative French Hill step into the role of leading the Financial Services Committee, overseeing legislation on digital assets and otherwise. Tom Emmer, another crypto-friendly lawmaker, said on Oct. 20 that he planned to seek the speaker seat, drumming up support from some of his Republican colleagues — reportedly including McCarthy.

1) This week in Congress and crypto: Another week of House Speaker drama and intense focus on Israel/Hamas. For crypto there is a lot of tangental elements on both issues. Many of the speaker candidates have a strong record on crypto so let's quickly meet them and fights to come.
— Ron Hammond (@RonwHammond) October 23, 2023

“If the [Republicans] can’t get a consensus on a clear candidate, it is likely McHenry will remain temp speaker,” said the Blockchain Association’s director of government relations, Ron Hammond, in an Oct. 23 X (formerly Twitter) thread. “[Representative Byron Donalds] is also in the race and he has also been a champion for crypto legislation on a variety of fronts with a particular bent on oversight of the current Admin. [Representative Pete Sessions] is another pro-crypto candidate who has been a champion on issues like bitcoin mining.”

Hammond added:

“In the Speaker race there are several pro-crypto candidates. [Tom Emmer] is the frontrunner, but as the past few weeks have shown it is far from a guarantee he will become Speaker.”

The lack of a speaker effectively halts progress on crypto bills passed by the Financial Services Committee, which had been expected to head for a full floor vote. The Financial Innovation and Technology for the 21st Century Act, the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act and the Keep Your Coins Act are all legislatively on hold until a speaker is voted in.

Though the House is “legislatively in a standstill,” according to Hammond, certain lawmakers have still moved forward with pushing anti-crypto policies within their power. More than 100 members of the House and Senate signed their names to a letter calling for action from the White House in addressing the role cryptocurrency may play in financing terrorism. The statement followed Hamas’ attack on Israel on Oct. 7.

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Pro-crypto lawmaker stays interim US House Speaker as frontrunner loses first round of voting

October 17, 2023 Coin Telegraph

Coin Telegraph

Ohio Representative Jim Jordan, the Republican Party's nominee for Speaker, won the support of 200 of his colleagues in an Oct. 17 vote — below the 217 needed to hold the position.

North Carolina Representative Patrick McHenry, chair of the United States House Financial Services Committee and crypto proponent in Congress, is still temporarily in the third most powerful role in government after one of his Republican colleagues failed to secure enough votes.

In a vote conducted with members of the U.S. House of Representatives on Oct. 17, no candidate for Speaker won a majority of votes needed to secure the position. Ohio Representative Jim Jordan, the Republican Party's nominee for Speaker, obtained 200 votes — short of the 217 needed to win.

All 212 Democratic members of the House voted for Minority Leader Hakeem Jeffries, with other votes by Republican lawmakers going to Representatives Steve Scalise, Kevin McCarthy, Tom Emmer, Tom Cole, Thomas Massie and Mike Garcia, as well as former New York Rep. Lee Zeldin. According to House rules, a Speaker need not be a member of Congress.

Rep. McHenry, who has been serving as interim Speaker since Republican members voted to oust McCarthy on Oct. 4, currently lacks the authority to move legislation forward in the House, with the exception of the Speaker vote. For the first time in U.S. history, half of the legislative branch of the federal government was largely paralyzed, making it impossible to move forward with crypto-related bills.

*Rep. Patrick McHenry addressing the U.S. House of Representatives on Oct. 17. Source*

Many pro-crypto users on social media have called on lawmakers to make McHenry the next Speaker — an outcome which would also require nearly all Republicans in the House to unite behind one candidate. Behind U.S. President Joe Biden and Vice President Kamala Harris, the Speaker of the House is second in the country's presidential line of succession. However, some experts have reportedly said the line of succession does not apply to an interim Speaker like McHenry.

At the time of publication, it was unclear when McHenry planned to call for a second vote. Many have criticized Jordan for repeating falsehoods surrounding the results of the 2020 presidential election in favor of former President Donald Trump, but he remains the leading candidate with a Republican majority in the House and Democrats united behind Jeffries.

McHenry led the House Financial Services Committee as lawmakers voted in favor of crypto bills including the Financial Innovation and Technology for the 21st Century Act, the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act and the Keep Your Coins Act. The pieces of legislation are expected to head to the House floor for a full vote, but the current situation with the Speaker makes that unlikely in the near future.

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House committee chairman threatens SEC chair with subpoena, but not over crypto

October 12, 2023 Coin Telegraph

Coin Telegraph

U.S. House Oversight and Accountability Committee chair James Comer thinks Genlser is stonewalling him. Crypto supporters know the feeling.

James Comer, chair of the United States House of Representatives Oversight and Accountability Committee, has threatened Securities and Exchange Commission (SEC) chair Gary Gensler with a subpoena. He wrote in the letter dated Oct. 12, that the committee will have “no choice” but to use compulsory measures to obtain documents if the SEC does not start cooperating with it.

Comer also expressed concern about SEC “actions taken to circumvent Congress to further an agenda that harms American taxpayers.” Cryptocurrency proponents in Congress have often complained about Gensler in similar terms, but this letter is not about crypto. Rather, Comer was writing about coordination with the European Union (EU) on environmental, social, and governance (ESG) and climate-related issues, as well as SEC stonewalling.

Gensler is before the SEC’s oversight committee.
The Chairman opened by threatening him with a subpoena as they haven't been responding to requests from this committee
Chairman McHenry is going after him hard
Also this... pic.twitter.com/uYLhyCyLRG
— Alistair Milne (@alistairmilners) October 12, 2023

Comer and Senator Tim Scott, who is now running in the Republican presidential primary, wrote to Gensler in June asking for information about United States’ cooperation with the EU on climate legislation that could impact U.S. companies. They sent a similar letter to Treasury Secretary Janet Yellen. In his latest letter, Comer said:

“To date, the SEC has not produced documents that are substantively responsive, and to date the overwhelming majority of documents produced have been publicly available on the SEC’s website, […] or documents that were already released pursuant to the Freedom of Information Act.”

These words practically mirror Patrick McHenry’s letter of April 12, where he wrote, “The 232 pages of documents provided by your staff after the briefing are publicly available and not responsive to the request.” McHenry was writing about his information request relating to the prosecution of former FTX CEO Sam Bankman-Fried. McHenry also threatened Gensler with a “compulsory process.” McHenry repeated that threat in person in a House Financial Services Committee hearing.

Crypto supporters will also hear echoes of themselves in Comer’s phrase “it is not clear that the law provides such authority and we must determine whether legislation is necessary.” In his first letter, Comer reminded Gensler of the Supreme Court’s West Virginia v. EPA ruling, which pertained to the major questions doctrine and could have an impact on the SEC’s activities in the crypto sphere as well.

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Crypto advocates weigh on race for next US House Speaker

October 10, 2023 Coin Telegraph

Coin Telegraph

Lawmakers are scheduled to return to the House of Representatives on Oct. 11 to vote on a replacement for Speaker Kevin McCarthy, whose position has been vacant for a week.

At the time of publication, half of the legislative branch of the federal government of the United States was largely paralyzed following a vote ousting then Speaker Kevin McCarthy.

U.S. lawmakers voted to declare the office of Speaker of the House of Representatives vacant on Oct. 3, marking the first time in the history of the United States the government body was without leadership. Representatives are scheduled to return to Congress on Oct. 11 to vote on a new Speaker, with reports suggesting that Republicans Jim Jordan and Steve Scalise were the leading candidates.

House speaker race.

Convention (Scalise) Vs Chaos (Jordan).https://t.co/sTQKHjY2wC
— CryptoSmind (@SmindCrypto) October 10, 2023

Following McCarthy’s absence, crypto-friendly lawmaker Patrick McHenry has been acting as the interim Speaker but is not expected to be a contender for the job. Former U.S. President Donald Trump has given his endorsement to Jordan, who has repeated falsehoods surrounding the results of the 2020 presidential election. Scalise, who has reportedly described himself as akin to white supremacist David Duke “without the baggage” may also receive support from many in the Republican Party.

“[The Speaker’s race] paralyzes the House on nearly every front legislatively,” said the Blockchain Association director of government relations Ron Hammond in an Oct. 10 X thread. “If it drags out over another week then a lot of things can happen including potential new speaker candidates coming forward. For crypto though, McHenry is still the person to watch. He wants votes on crypto ASAP.”

According to Hammond, the uncertainty surrounding the House Speaker along with the criminal trial of Sam Bankman-Fried and the war between Israel and Hamas “could push bills like stablecoins” to November or December:

“These major events will also dovetail into the 2024 election cycle. Presidential election years are hard to pass anything meaningful in Congress as everyone is focusing on winning.”

Ji Kim, head of global policy for the Crypto Council for Innovation, told Cointelegraph crypto was "becoming a priority" for Congress. According to Kim, legislation including the Financial Innovation and Technology for the 21st Century Act and the Clarity for Payment Stablecoin Act "will likely be delayed until a new Speaker is elected".

It’s unclear how Republican lawmakers plan to prevent a repeat of the events leading to McCarthy being chosen as Speaker in January. It took 15 rounds of voting before the California Representative could officially hold the gavel, during which time all legislation was on hold.

Neither Jordan nor Scalise have been particularly outspoken about any pro- or anti-crypto positions they may hold. Crypto-focused bills passed by the House Financial Services Committee in July could move forward with a floor vote in the full House before the next session of Congress, but delays in determining a Speaker and consequently dealing with a potential government shutdown in November could stymie progress.

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Crypto-friendly Patrick McHenry takes interim House Speaker position

October 4, 2023 Coin Telegraph

Coin Telegraph

Eight Republicans voted against Republican Representative McCarthy, making it the first time in U.S. history that the House Speaker has been ousted by Congress.

United States Representative and crypto-friendly lawmaker Patrick McHenry has been appointed as interim House Speaker after the high-profile ousting of U.S. House speaker Kevin McCarthy.

McCarthy’s ousting came after a 216-210 vote by Congress, with eight of the 216 votes coming from McCarthy’s fellow Republicans, marking the first time a House Speaker has been removed in U.S. history, according to Reuters.

The vote was prompted by a motion from one of McCarthy’s political rivals, Matt Gaetz, who called into question several contradictory promises made by McCarthy.

Though temporary, McHenry’s appointment could be seen as a small win for the digital asset sector. The Speaker sets the House’s legislative agenda, controls committee assignments, and schedules specific bills to be debated and voted upon in the chamber.

House Speaker is considered the most influential position in the U.S. government behind the President and Vice President.

Meanwhile, McHenry is regarded as one of the biggest challengers to the Securities Exchange Commission’s regulation by enforcement-style approach to the cryptocurrency sector.

McHenry also grilled SEC Chair Gary Gensler in his testimony before Congress last week, suggesting he’s attempting to “choke off the digital asset ecosystem.” McHenry also called Gensler out for refusing to be transparent with Congress about the SEC’s connections with FTX and its former CEO, Sam Bankman-Fried.

SEC Chair @GaryGensler refuses to schedule a Commission vote to provide Congress with requested documents.

Should Gensler continue to stonewall, Republicans will have no choice but to issue the first subpoena to the SEC from my Committee to compel their production. https://t.co/Aw5U0aJ0Tt
— Patrick McHenry (@PatrickMcHenry) October 2, 2023

McHenry also released the discussion draft “Digital Asset Market Structure Proposal” on June 1, which purports to provide clarity, fill regulatory gaps, and foster innovation in the cryptocurrency space, a paper that was praised by some industry leaders.

However, McHenry’s tenure as House Speaker may be short-lived, with an official vote on a new House Speaker set for Oct. 11, according to Bloomberg.

A Reuters report speculates that along with McHenry, there is a possibility that pro-crypto Representative Tom Emmer or even Donald Trump could be a possible replacement for McCarthy, though none have publicly expressed interest in taking the position.

50-50 we get a crypto champion as Speaker now, with Whip Emmer and Speaker pro tempore McHenry in the running. Wild day.

(Speaker of the House is third in power behind President and VP for the non-US followers out there.) https://t.co/2ow5li2lnw
— Ryan Selkis (@twobitidiot) October 3, 2023

Meanwhile, McCarthy has already confirmed he won’t run for House Speaker again.

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SEC’s Gensler taken to task over crypto custody guidance again in House hearing

September 27, 2023 Coin Telegraph

Coin Telegraph

The SEC’s controversial Staff Accounting Bulletin 121 has received a steady flow of criticism since its publication in March 2022.

Gary Gensler, chairman of the United States Securities and Exchange Commission, told the House Financial Services Committee hearing on Sept. 27 that he enjoys testifying before the committee. He had well over four hours of that pleasure that day, much of which was devoted to criticism of his agency’s policies and actions.

Among the long list of discontents, one of the most narrowly focused was Representative Mike Flood’s questioning regarding the SEC’s Staff Accounting Bulletin (SAB) 121, issued in March 2022. The SAB concerned accounting and disclosure of crypto assets in the custody of public companies such as banks and platforms like Robinhood and Coinbase.

Flood confirmed Gensler’s previous testimony to the committee that the SEC did not confer with prudential regulators before publishing the SAB. Nor had the Financial Accounting Standards Board (FASB), a private body that issues standards relating to Generally Accepted Accounting Principles (GAAP), issued anything related to digital asset custody, Flood continued. Rather, the FASB added digital assets accounting standards to its agenda in May 2022, after the publication of SAB 121.

*SEC chair Gary Gensler testifying before the House Financial Services Committee. Source: GOPFinancial Services YouTube channel*

Gensler said in a previous hearing that SAB 121 provides guidance on applying existing requirements under SEC rules, Flood reminded him. What requirements were there, Flood asked. Gensler replied that there is a rule from 2009 on the custody of digital assets by investment advisers, and the agency had “finalized something around special purpose broker-dealers,” Gensler replied. He was apparently referring to an SEC rule made in April 2021.

“There were no SEC rules on the books that directly addressed the topic of custody of digital assets,” Flood replied. A rulemaking on custody, including digital asset custody, was proposed in February 2023 and has not yet been finalized, he added, concluding:

“At the time when the bulletin was issued, there was no action by FASB, nor rulemaking by the SEC on this topic. […] The SEC’s justification for issuing the bulletin is based on accounting guidelines that did not exist when the bulletin was issued.”

Either the SEC knew there was no “strong” justification for issuing the guidance in the bulletin and did so any way, or it did so in error, Flood said.

SAB 121 requires the disclosure of technological, legal and regulatory risks associated with custodying digital assets. It met with opposition from the start. SEC commissioner Hester Peirce released a critical response on the day it was issued. Five senators, including crypto advocate Cynthia Lummis, sent a letter Gensler in June calling the SAB “regulation disguised as staff guidance.” Lummis and committee chair Patrick McHenry sent another letter to prudential regulators in March arguing that the SAB places the interests of crypto holders at greater risk than before it was issued.

Four Financial Services Committee members - Flood, Wiley Nickel, Tom Emmer and Ritchie Torres - sent Gensler a letter a day earlier calling for him to approve spot Bitcoin exchange-traded funds. That topic was not pursued very closely in the hearing.

Summary of the 3 hr+ @FinancialCmte Oversight of the SEC hearing w/ @GaryGensler: (paraphrasing)
- I don't answer Yes / No questions
- I'll get back to you following my staff's guidance
- We're protecting the American public
- We're not changing anything for crypto; current laws… pic.twitter.com/R7Yj4SBNHL
— William Mougayar (@wmougayar) September 27, 2023

Gensler told Nickel that the SEC is “still under advisement” on Grayscale case after the company won an appeal against the SEC’s decision to reject its Bitcoin ETF application. Committee member Warren Davidson expressed his concern that the SEC would not approve spot Bitcoin applications in the order they were received, in light of the Grayscale decision. Gensler replied that the applications were still under “active consideration.”

Emmer criticized Gensler alleging he was not impartial within the financial industry. Torres engaged Gensler over the interpretation of the Howey test.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

US Anti-CBDC bill moves a step closer to passing

September 21, 2023 Coin Telegraph

CBDC

The “CBDC Anti-Surveillance State Act,” aimed at preventing the Federal Reserve from issuing a central bank digital currency, has passed the House Financial Services Committee.

The CBDC Anti-Surveillance State Act, aimed at preventing “unelected bureaucrats in Washington” from issuing a central bank digital currency (CBDC), has taken one step further on its procedural journey after it passed the House Financial Services Committee.

According to a press release distributed by the bill’s author, Representative Tom Emmer, on Sept. 20, the CBDC Anti-Surveillance State Act was passed out of the committee and favorably reported to the House floor. That means the bill will next face a congressional vote.

Emmer stressed that the bill has already gained the support of 60 members of Congress. In his remarks regarding the committee’s decision, Emmer once again emphasized the dangers of state control over currency and its incompatibility with American values:

“American values. American values. This is what the future global digital economy needs. If not open, permissionless, and private — just like cash — a central bank digital currency is nothing more than a CCP [Chinese Communist Party]-style surveillance tool that can be weaponized to oppress the American way of life.”

Emmer and 49 original co-sponsors reintroduced the CBDC Anti-Surveillance State Act in the United States House of Representatives on Sept.14. It was first formally introduced to Congress in February 2023.

The bill contains provisions that would prevent the Federal Reserve from issuing a CBDC to individuals and bar the Fed from utilizing any CBDC for the purpose of implementing monetary policy.

In his recent interview with Cointelegraph, Emmer called digital assets a “sleeper issue” in U.S. politics, both at the state and federal levels. According to Emmer, there is a generational divide in the U.S. in which residents could push back on policies that potentially inhibit the digital space and, in doing so, “flush out” technologically ignorant lawmakers.

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House Financial Services Comm. witnesses air multiple anti-CBDC arguments

September 14, 2023 Coin Telegraph

CBDC

The digital assets subcommittee heard from five opponents of a U.S. CBDC without giving supporters equal (or any) time.

A chorus of disapproval rang out from the halls of the United States Congress on Sept. 14 as the House of Representatives Financial Services Committee digital assets subcommittee held a hearing on the “digital dollar dilemma.” Five expert witnesses were scheduled to testify at the hearing, and all of them argued against creating a U.S. central bank digital currency (CBDC), otherwise known as a digital dollar.

The five witnesses slated to speak at the hearing were Digital Asset CEO Yuval Rooz, senior vice president of the advocacy group Bank Policy Institute Paige Paridon, University of Pennsylvania Wharton School's Christina Parajon Skinner, Norbert Michel from the think-tank Cato Institute and Columbia University lecturer Raúl Carrillo.

The hearing is explicitly dedicated to private sector alternatives to CBDC, but only Rooz was directly affiliated with a business.

Digital Asset is the creator of the Daml smart contract language and the Canton blockchain, which is backed by companies such as Microsoft, Goldman Sachs and Deloitte. In his prepared testimony, Rooz urges that any form of digital dollar should leverage existing technologies in the private sector.

#TODAY @ 2 PM - Subcmte RM @RepStephenLynch leads Democrats as the Subcmte on Digital Assets, Financial Technology and Inclusion holds a hearing entitled “Digital Dollar Dilemma: The Implications of a Central Bank Digital Currency and Private Sector Alternative”

:…
— U.S. House Committee on Financial Services (@FSCDems) September 14, 2023

Paridon spoke about claims made by digital dollar supporters with counterarguments. She concentrated on issues that could arise within the banking system. Based on this list of potential risks, she concluded, “A CBDC could undermine the commercial banking system in the United States and severely constrict the availability of credit to the economy.”

Skinner set CBDC largely in a historical context, beginning with the apparent intentions of the Founding Fathers. She concluded:

“Introducing CBDC is likely to have certain costs to individual economic liberty by providing the State with more tools – and hence greater temptation – to establish command-and-control style public policy.”

The Cato Institute has a well-established record as an opponent of CBDC. Michel addressed technical and political issues and sees no good coming from a U.S. CBDC.

Carrillo stated his support for a digital dollar and opposition specifically to a CBDC. A major objection put forward by Carrillo to CBDC is the concentration of responsibilities in the Federal Reserve since the Treasury Department has many roles in monetary creation and implementation of financial technology.

In his analysis, Carrillo stated, “There is a profoundly mistaken assumption that we do not already live in a financial surveillance state.” He continued:

“Although counterintuitive to some CBDC critics, substantively reigning in government financial surveillance means limiting public-private partnerships, as direct relationships between the government and members of the public are more likely to engender constitutional protections, including protection under the Fourth Amendment.”

Blockchain technology is not a decisive factor in ensuring privacy, Carrillo argued:

“Aspirationally, blockchain hides sensitive data about users, but in practice, blockchain systems necessarily interface with the surveilled infrastructure of the rest of the internet.”

Carrillo endorsed the Electronic Cash and Secured Hardware (ECASH) Act, which was not one of the bills being examined by the subcommittee but was, Carrillo said, being re-introduced on Sept. 14. Carrillo concluded that “DFC [digital fiat currency] discourse in the United States is comparatively impoverished and unimaginative. […] Policymakers should support an array of Digital Dollar pilot programs and develop a steady rhythm of innovation, aiming to build a safe and secure financial system for all.”

Among the questions that go unanswered in the presentations was that of who precisely the often-mentioned supporters of CBDC are. References were made to CBDC research being conducted by the Fed. Still, in light of the Fed’s well-known mantra of no CBDC without Congressional authorization, that seems like a paper tiger.

H.R. 3402, one of the bills under discussion at the hearing, seeks to make a Congressional mandate for the introduction of a CBDC a legal requirement. H.R. 3712, also under consideration, would largely ban CBDC research. Rep. Tom Emmer’s recently re-introduced "CBDC Anti-Surveillance State Act" was also on the hearing agenda.

Presumably, the Biden administration was seen as supportive, as the president’s March 2022 executive order on digital assets mandated CBDC research. The advocacy group Digital Dollar Project, co-founded by former U.S. Commodity Futures Trading Commission head Christopher Giancarlo, has also contributed significantly to CBDC research.

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