Members of the United States House committee on National Security, International Development and Monetary Policy expressed concern about China’s leadership in developing a national digital currency (CBDC). The Block reports.
During the hearings, lawmakers sought to determine how large the United States’ lag in this segment was and the prospects of China overtaking the leadership. They were also interested in the risks of further delays in developing the digital dollar and the possibility of accelerating it through government or private-sector initiatives.
Julia Coronado, founder of MacroPolicy Perspectives, identified as a sign of the United States’ persistent lag “the widespread adoption of CBDCs and their use in cross-border payments.”
There were also voices who argued not to overstate the situation. Robert Baldwin, head of policy development at the Digital Asset Association, said that China will not succeed because of privacy concerns and a lack of controls over capital flows.
“The United States needs to catch up with China, but with the emergence of its own alternative, the current financial system will have an incentive to move to the digital version of the dollar,” he explained.
Representative Tom Emmer urged that the design of the digital dollar exclude the possibility of citizen surveillance, so as not to put the United States in the same camp as China’s digital authoritarianism.
In July, the BIS emphasised the need to focus CBDCs on their use in cross-border payments.
In July, the Bank of France and the Monetary Authority of Singapore successfully completed a pilot of wholesale CBDCs for cross-border payments.
In June, the Bank of France tested a CBDC in intergovernmental settlements in collaboration with the Swiss National Bank and BIS Innovation Hub.
In February, the People’s Bank of China and the UAE central bank joined the mBridge project for the digital versions of Hong Kong and Thailand’s currencies.
In December 2020, the Hong Kong Monetary Authority discussed with the People’s Bank of China the possibility of testing CBDCs in cross-border payments.
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