WASHINGTON—Two U.S. congressmen are expressing concerns the increasing use of cryptocurrency put the U.S. dollar at risk, especially as digitization sweeps the globe and governments move to modernize their monetary systems and reinvent how they transfer, distribute and create money.
Representatives French Hill (R-AR) and Bill Foster (D-IL) have issued an open letter to Federal Reserve Chairman Jerome Powell expressing their concerns about the status of today’s U.S. dollar.
“In the wake of Facebook’s Libra, a digital asset project that is fighting to appease regulators, governments are facing the emergence of a massive project that can scale instantly, that can cross borders without banks and onboard a built-in userbase of billions to send money around the globe as easily as email,” The Daily Hodl reported. “The revelations are forcing lawmakers to rethink how to tackle the threat to the U.S. dollar.”
“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,” the reps wrote.
‘Increasing Imperative’
Calling the need for a U.S. dollar digital currency “increasing imperative,” the lawmakers cite a number of pilot tests and examples around the world, from the “e-krona” in Sweden to Uruguay’s “e-peso” to China’s central bank-backed digital currency that’s expected to launch in 2020.
“While some Americans use cryptocurrency for speculative purposes, usage of digital assets may well increasingly align with that of paper money in the future,” the lawmakers stated.