Two US Congress officials are looking into the surge of cryptocurrency, they believe that the US dollar could be on the verge of being left out.
While digitization is at its peak and governments are modernizing the Financial operation systems, reimagining the ways to transfer, disburse & amass money.
The officials Bill Foster and French Hill issued an open letter to the Federal Reserve Chairman, Jerome Powell expressing their skepticisms regarding the stature of the US dollar currently.
The representatives, Foster & Hill raising the requests to Federal Reserve Board asking answers to the list of inquiries pertaining to the making of the digital US currency.
While Libra is trying hard to please the regulators and lawmakers around the world, governments see the rise of a humongous, scalable project, that will be influential all over the world, without the interference of banks. It has already paved the way for a platform with billions of people registered to transact money worldwide.
But the ongoing events in the criminal wake is prompting the lawmakers to reimagine tackling the danger to the US currency.
The letter states,
“As you are aware, the nature of money is changing. While this is not a new phenomenon – one might recall the advancement of paper money in China in the 9th century from a coin-based system – more recent advancements could be described as an inflection point in the evolution of money and payments. As outlined in more detail below, the Federal Reserve, as the central bank of the United States, has the ability and the natural role to develop a national digital currency.”
Given that the need to regulate the currency to protect the US dollar is seen as imperative, the officials state different pilot tests along with the instances around the world.
“While some Americans use cryptocurrency for speculative purposes, usage of digital assets may well increasingly align with that of paper money in the future.”
They also note that the risks from the private sector, slowly taking form.
“Relying on the private sector to develop digital currencies carries its own risks, including loss of control of monetary policy, as well as the ability to implement and enforce effective anti-money laundering and counter-terrorism financing (AML/CTF).
The Facebook/Libra proposal, if implemented, could remove important aspects of financial governance outside of U.S. jurisdiction. In the private sector, J.P. Morgan recently became the first U.S. bank to create and successfully test a digital coin representing a fiat currency. Additionally, next year, Wells Fargo plans to begin piloting Wells Fargo Digital Cash which will be a cryptocurrency linked to the U.S. dollar.”