Financial Services Committee Republicans ask Fed for clarification on CBDC

Bank Regulatory Federal Issues Digital Assets Federal Reserve CBDC Digital Currency Federal Reserve Act

On September 7, Republican members of the House Financial Services Committee submitted a letter to Federal Reserve Vice Chair Lael Brainard in response to a May hearing examining the potential impact of a Central Bank Digital Currency (CBDC). The letter, among other things, requested that Brainard provide her testimony regarding the Fed’s authority under the Federal Reserve Act to issue a CBDC (and without separate specific authorizing federal legislation). Specifically, the members requested that Brainard clarify: (i) the Fed’s motivation for issuing a CBDC; (ii) the need for Congress to support a Fed-issued CBDC; (iii) the Fed’s position on individual retail accounts at the Fed; (iv) the need for Congress to authorize an intermediated CBDC model; and (v) the need for “strong support” from the Executive Branch. The members asked for a response in writing by September 30.