Here's Why the US Will Fall Behind on Digital Currency

Plus: Which country holds the most Bitcoin?

Will digitizing the dollar help maintain its global supremacy? And can Congress pull it off? Photo by 金 运 on Unsplash

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Here's Why the US Will Fall Behind on Digital Currency

There are at least a couple of reliable methods to focus the roving Congressional mind on financial regulation. One is for something in financial markets to go spectacularly wrong, as with the meltdown of the Terra/Luna algorithmic stablecoin earlier this month, which wiped out some $40 billion of digital value in a couple of days. That seems to have been the proximate cause for a House Financial Services Committee hearing on Thursday, devoted to the idea of the US creating a central bank digital currency (CBDC); Federal Reserve Vice Chairwoman Lael Brainard was the sole witness.

The hearing was informative but strange; in general, Republicans for the last year or more have positioned themselves in favor of financial technical innovation, while portraying Democrats as obstructors. But when it comes to a CBDC, Republican foot-dragging was evident from the outset.