BitcoinBTC and ethereum’s price boom has thrust crypto back into the limelight—with the Biden administration declaring a crypto “emergency.”
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The bitcoin price has doubled over the last six months, pushing the ethereum price up with it, as a Wall Street rush into bitcoin gives crypto credibility (and a billionaire’s huge bitcoin bet has been uncovered).
Now, leaked comments from a closed-door meeting between Federal Reserve chair Jerome Powell and senior Democrats has revealed discussions on the creation of a bitcoin and crypto-inspired central bank digital currency (CBDC), sometimes called a digital dollar, are continuing.
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Powell told Democrats on the House financial services committee Congress approval would be required before the Fed created a digital dollar, saying: “If we’re going to have a CBDC, Congress needs to authorize it,” Politico reported, citing a source in the meeting.
“We aren’t advocates, but we haven’t made a decision to recommend a CBDC to Congress.”
A future digital dollar, which would overhaul the way the commercial banking industry works and potentially hand never-before-seen powers to the government over how people spend their money, has become a culture war flash point, dividing those or see it as
Former U.S. president and 2024 Republican front-runner Donald Trump has said he’d block the creation of a digital dollar if he retakes the White House this year, based on the advice of Vivek Ramaswamy, who had been challenging Trump for the Republican nomination before dropping out and endorsing Trump.
China is leading the way on the development and rollout of a CBCD with its digital yuan, while the E.U. and the U.K. are each exploring a digital euro and a so-called “britcoin.”
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Meanwhile, Powell said the U.S. needs “a framework for stablecoins” and that he sees negotiations as getting “close” to a deal, according to a leaked account of a closed-door meeting with lawmakers reported by Politico.
Last week, U.S. Treasury secretary Janet Yellen told lawmakers that Congress should address gaps in crypto and stablecoin regulation, calling the need for it “critical.”
Representative Maxine Waters, who’s been negotiating with House financial services committee chair, Patrick McHenry, said Democrats and Republicans are “getting very close” to an agreement on a stablecoin bill.
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