CBDC and Blockchain in the US: the political debate between Democrats and Republicans

Maxine Waters of the Democrats has raised the political debate regarding pending legislation on Central Bank Digital Currency (CBDC) and blockchain. Basically, Waters sees Republicans who support crypto and decentralization as hindering central banks from creating a CBDC. 

CBDC and Blockchain in the US: Democrat Maxine Waters fights back 

Yesterday, Democratic Representative Maxine Waters criticized the Republicans’ bill, which she called anti-innovation for CBDCs in the US. 

Basically, in the US, it would be Republicans who would support crypto-friendly regulations and blockchain development, but it appears that decentralization would hinder the work of central banks in creating a CBDC. 

The bill in question is from Representative Tom Emmer of the Republicans, and he wants anti-cryptocurrency central bank oversight. 

In this regard, Waters reportedly said the following:

“Unfortunately, this bill, which I will call the CBDC anti-innovation act…would commonly shut down important work the Fed is doing to research a potential US CBDC. Instead of taking steps to ensure the United States wins the digital currency space race against emerging powers like China, Republicans are making baseless attacks against the CBDC that does not even exist.”

Democratic Congressman Stephen Lynch, also added his comment: 

“We’re allowing 130 other countries that are all researching this CBDC idea, we’re allowing them to take the initiative away from the United States, plain and simple.”

CBDC vs Blockchain in the US: Republican Emmer defends his legislative proposal

While Democratic representatives are fighting back, Emmer defends his bill as follows: 

“This bill is simple. It halts the efforts of this administrative state under President Biden from issuing a financial surveillance tool that will undermine the American way of life.”

Not only that, Emmer emphasizes that being in favor of crypto and blockchain, does not necessarily mean being in favor of CBDCs. Here is what he had to say about it:

“Unlike decentralized cryptocurrencies, a central bank digital currency is a digital form of sovereign currency that is designed and issued by a government and transacts on a digital ledger that is controlled by that government.”

But at the moment, the political debate in the US is on, even Brad Sherman of the Democrats commented as follows:

“I’m struck by the hypocrisy of the advocates of cryptocurrency. They come in and they say ‘cryptocurrency is wonderful because it’s digital and it’s high-tech and it’s innovative,’ and then they propose a bill which, in the words of the ranking member, is an anti-innovation bill.”

Financial supremacy in the crypto sector

The goal of both political parties in the US is to define a path through which the US is the dominant global financial leader, and today CBDC, crypto and blockchain can no longer be excluded from this discourse. 

Yet, just a week ago, it emerged that many citizens in the US do not like CBDCs, as calls are coming from various quarters for new regulation to prohibit the central bank from issuing a native digital dollar. 

Basically, the crux of CBDCs is that, unlike traditional versions of fiat currencies that are exchanged by digital means, is that they are natively digital. This means that all transactions are recorded on a single central ledger held, guarded, and managed by the central bank. 

Not only that, unlike Bitcoin and its distributed Blockchain ledger, transactions in CBDC will not be anonymous, as there will be authentication and verification of the identity of its clients. 

This means that with a US-based CBDC, the Fed not only has access to all the information of all transactions, but can also easily trace the senders and recipients. 

In the US, the first politician to promise to ban the issuance of a natively digital dollar, namely the CBDC, was Ron DeSantis of the Republicans.