The chairman of the Federal Reserve System, Jerome Powell, called the development of a U.S. central bank digital currency (CBDC) a “critical job,” telling Senate Banking Committee a Sen. Congress “would” be ideal. “
A two-and-a-half-hour committee hearing was intended to discuss the CARES Act – the $ 2.2 trillion economic stimulus package signed into law by then-President Donald Trump in March 2020 – sparked as committee members discussed the next vote to lift the debt ceiling, which has fiscal secretary Janet Yellen said had to be done by Oct. 18 for the U.S. government to avoid defaulting on its existing legal obligations, including Social Security benefits and military salaries.
Powell passed Congress approving legislation that would authorize a digital dollar, in response to a question from Toomey about whether such legislation is necessary.
Toomey was the only lawmaker who asked questions about cryptocurrency, telling the Fed chair that the U.S. central bank may not be suitable to become a retail bank, and advocating for a combination of privately issued digital currencies and a true central bank digital currency.
“The privacy of Americans must be respected,” Toomey said. “We don’t have to project a digital dollar from a central bank that allows the government to spy on Americans every transaction.”
More extensive regulation
Although the debt ceiling was the main topic of conversation, issues of financial privacy also emerged during Tuesday’s hearing.
Senator Cynthia Lummis (R-Wyo.), A well-known supporter of cryptocurrencies and blockchain technology, blamed the Treasury Department for the Internal Revenue Service (IRS) to push implement new regulations forcing banks to report transactions from all accounts with more than $ 600.
“This is invading privacy,” Lummis told Yellen. “People in Wyoming will literally find alternatives to traditional banks just to prevent IRS access to their personal information, not because they’re trying to hide anything, but because they’re not willing to share everything.”
Senator Elizabeth Warren (D-Mass.) Took a different stance on financial regulation, calling Powell a “dangerous man” because of his history of “irregular actions.”
“Your record worries me a lot,” Warren told Powell. “Again and again, you have acted to make our banking system less secure … and that is why I will oppose your reputation” as head of the US central bank when his term ends in 2022. (His term as a member of the Government ends in January 2028 .)