WASHINGTON — Lawmakers from both parties say the Federal Reserve needs legislative authority to issue a digital dollar, but the two sides have so far been unable to find a balance between privacy and security that could overcome the partisan divide.
The gap also appears to be widening, potentially stopping a digital currency before it ever gets issued. At least one Republican who three years ago warned the U.S. could fall behind without a Fed-issued digital dollar is now not so sure. Another Republican, Tom Emmer of Minnesota, introduced legislation in January that would prohibit the Fed from issuing a digital dollar to an individual.
Rep. Bill Foster, D-Ill., chair of the House Financial Services Task Force on Artificial Intelligence, said privacy, identification and anonymity will be the thorniest policy questions Congress will have to answer about a digital dollar.
“You can see it simply by the fact that all of the big proposals on this tread very lightly on the identity aspects of it,” Foster said in an interview. He said a central bank digital currency should offer privacy up to a point, but needs a way to unveil ownership in case of a crime.