Washington, D.C. – Today, U.S. Senator Cynthia Lummis (R-WY) joined her colleagues on the Senate Banking, Housing, and Urban Affairs Committee to discuss the potential for a digital dollar, or central bank digital currency (CBDC). The hearing, entitled “Building A Stronger Financial System: Opportunities of a Central Bank Digital Currency,” explored the competition the United States is facing from China in the realm of financial innovation.
“If we build a central bank digital currency in the right way, we can strengthen the global role of the U.S. dollar and secure a strong financial future for next generations in America,” Senator Lummis said. “We’ve been working in my office on some cornerstone principles that we think should be used to judge a CBDC proposal, and among those is privacy. One of the key motivations behind China’s digital yuan is surveillance and control of their financial system. So it’s clear that we can’t follow China down this road. Any U.S. CBDC should have the same or greater privacy than physical cash today.”
Listen to Senator Lummis’s questions here.
A Central Bank Digital Currency is a digital representation of fiat or government-issued currency, issued through a nation’s central bank. A CBDC may be issued on a distributed ledger, or blockchain. In America, a digital dollar would be backed by the full faith and credit of the United States government, just like the physical dollar. It would have the potential to make payments faster, cheaper and safer, if implemented with strong privacy protections.
Senator Lummis also announced during the hearing that, in the coming weeks, she will be releasing a set of core principles that any CBDC must include in order to ensure a strong financial future for Wyoming and all Americans.
Senator Lummis, along with Senators Kyrsten Sinema (D-AZ), Tim Scott (R-SC), Marsha Blackburn (R-TN), John Hickenlooper (D-CO), Mike Braun (R-IN), Mike Rounds (R-SD) and Bill Cassidy (R-LA) created the Senate Financial Innovation Caucus to highlight responsible innovation in the United States financial system, and how financial technologies can make markets more inclusive, safe, and prosperous for all Americans.