Republican Representative French Hill of Arkansas has joined the growing list of policymakers opposing the idea of a Central Bank Digital Currency (CBDC). The Congressman has proposed legislation prohibiting the Federal Reserve from issuing a digital currency without explicit Congressional authorization.
In an exclusive interview with Forbes on Aug. 23, Hill praised the Federal Reserve’s recent efforts to modernize the nation’s payment system through FedNow. However, he maintained that there should be a distinct separation between this system and the prospect of a CBDC.
Despite his endorsement of FedNow, he is against the idea of the Fed introducing a CBDC for retail use saying he “don’t see the need for it in a developed market like the United States.”
He further stressed the importance of private sector innovation around dollar-based stablecoins in determining the need and appetite for such payment technology.
The congressman asserted that CBDC development should be within clear legal frameworks with express approval of “Article One law from Congress.”
Hill emphasized the role of Congress in ensuring public confidence, especially regarding Fourth Amendment protections, stating that centralized digital currency concerns largely stem from misunderstandings and fears about the technology.
He remarked that the best way to manage the development of a CBDC is to have Congress authorize its plans. In his view, this will be the only way for users to have some confidence in such digitized currencies.
Growing opposition against CBDC
French Hill is not alone.
In April, Federal Reserve Governor Michelle W. Bowman said CBDC risks outweighed its benefits.
His concerns mirror those of several of his Republican peers, particularly regarding the possible programmability of a centralized digital currency.
With Hill’s recent legislative proposal, it is evident that the debate around CBDCs in the United States continues to intensify.
While proponents argue for the potential benefits and global competitiveness, skeptics raise concerns about privacy, security, and the implications for the broader financial system.
As discussions move forward, it is clear that the role of Congress in shaping the nation’s digital currency future will be pivotal.