The cryptocurrency market is currently declining, as Bitcoin drops by 4% and Ethereum is down by 3.5 percent. BNB, Solana, Cardano, and XRP have fallen by 1.9, 4.9, 3.3, and 3.4 percent, respectively.
In the middle of the continuing decline in cryptocurrency values, a Republican Representative in the United States submitted a bill that will bring significant change to the crypto industry. On January 12, 2022, Tom Emmer reported this new development, which caused cryptocurrency values to rise.
Central Bank-Issued Digital Currencies (CBDC)
Congressman has opposed the Federal Reserve’s continuous initiative to produce a digital dollar. The Federal Reserve is pushing for a US CBDC to compete with Ethereum, Bitcoin, Solana, Binance, and Ripple, among other major cryptocurrencies.
Minnesota Republican Representative Tom Emmer announced a measure prohibiting a government-backed digital currency and limiting the Federal Reserve’s ability to issue digital currency to citizens.
According to Tom Emmer, requiring people to register with the Fed to access US government-issued digital currency won’t be different from China’s digital totalitarianism. According to his remark, the Fed has no authority to grant retail bank accounts to people of the United States. This new phenomenon will push the country toward authoritarianism.
The Fed Chair, Jerome Powell, had previously said that other cryptocurrencies could coexist with CBDC. The congressman has opposed the idea of central bank-issued digital currencies, claiming that CBDC will allow the Federal Reserve to watch Americans, defeating the point of a decentralized cryptocurrency.
He claimed that a CBDC would allow the Federal Reserve to perform like a retail bank, obtain personal data, and track individual transactions.
CBDC Acceptance Across The World
According to the Atlantic Council, 87 countries are issuing digital currencies, accounting for 90% of global GDP. Nine nations have created digital currencies, including Nigeria, which did so last year with the e-Naira, and 14 more are testing them out, including China.
Countries with large central banks, such as the United States, Japan, and the United Kingdom, are lagging. The Federal Reserve has not set a date for introducing a central bank digital currency. However, in a post-meeting news conference, Powell emphasized that they would take their time to do it well rather than focus on how to do it quickly.
The Fed’s Jerome Powell informed a US Senate committee that it would be releasing a report on the highly awaited Central Bank Digital Currencies in the coming weeks.
The influence of the adoption of government-backed digital currencies on decentralized cryptocurrencies is unknown. Big crypto investors keep an eye on this new development among major economies.