US Lawmakers Criticize Crypto, Push for CBDCs

During a recent press conference, US Democratic lawmakers strongly criticized cryptocurrencies, describing them as an outright “scam” while advocating for the creation and implementation of a central bank digital currency (CBDC).

Democratic Representatives on Crypto and CBDCs

Representative Maxine Waters referred to the CBDC Anti-Surveillance State Act, a bill aimed at preventing the creation of a government-controlled digital dollar, as the “anti-innovation act.” Waters argued that the anti-CBDC bill, along with the GENIUS stablecoin bill, “endanger our national security.”

Representative Stephen Lynch, present at the press event, stated that cryptocurrency lacks a legitimate use case:

“As a committee, we've learned that there is no legitimate use case for cryptocurrency, as of yet, unless you count the illegal practices of every single ransomware heist that has affected US businesses, which have been fueled and facilitated by cryptocurrency.”

He added, “It's a highly risky and volatile product that has no business in a functioning and well-regulated financial system. This entire industry is a scam.”

Former US President Donald Trump also signed an executive order to ban CBDCs during his term.

Global Perspectives on CBDCs

Federal Reserve Chair Jerome Powell mentioned in a Senate hearing that the central bank wouldn't develop a CBDC during his tenure. Meanwhile, several other countries are advancing with digitizing their fiat currencies.

These nations aim to enhance their currencies' competitiveness in the digital era while retaining sovereign control and avoiding reliance on third-party stablecoin issuers.

For instance, the Reserve Bank of India is expanding its CBDC test trials to explore innovative applications for its digital rupee.

Australia's central bank also plans to test wholesale CBDCs in a controlled experiment with selected institutions.

However, Bank of England Governor Andrew Bailey has cautioned against issuing a CBDC, suggesting it could destabilize the banking system. He proposed focusing on tokenizing deposits instead.

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