U.S. Lawmakers Demand Justice Department’s Assessment on Digital Dollar Legislation

Republican members of the U.S. House Financial Services Committee have requested the Department of Justice provide its assessment and legislative proposals regarding a digital dollar within 10 days. In an Oct. 5 letter addressed to U.S. Attorney General Merrick Garland, 11 Republican lawmakers asked the Justice Department for a copy of its assessment of whether legislative changes would be necessary to issue a Central Bank Digital Currency (CBDC), as mandated by President Joe Biden’s executive order on digital assets issued in March.

The House members claimed the appropriate place for the discussion on legislation concerning a CBDC should be within the U.S. legislative branch rather than relegated to the federal executive department. “The House Committee on Financial Services […] has spent considerable time and resources examining both the potential risks and benefits of a CBDC,” stated the letter. “The Committee’s review has included analyzing whether the Federal Reserve has the authority to issue a CBDC without authorizing legislation. Committee Republicans emphasized in our CBDC principles that the Federal Reserve does not have the legal authority to issue a CBDC absent action from Congress.”

Key Signatories and Context

The letter included signatures from ranking member Patrick McHenry, who recently participated in the Converge22 conference in San Francisco, and Representative Tom Emmer, known for his criticism of the Treasury Department’s sanctions against the crypto mixer Tornado Cash. The lawmakers have requested a response from Garland by Oct. 15.

Legal Framework and Regulation

On Sept. 16, the White House released a report establishing a comprehensive framework for cryptocurrencies in the U.S., which included exploring a CBDC. The Justice Department has been tasked with investigating the potential threats stemming from the illicit use of digital assets, along with proposing changes to existing policies and laws.