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The House of Representatives passes a law against MNBCs

The House of Representatives passes a law against MNBCs

The US House of Representatives has taken an important step towards banning central bank digital currencies in the US, passing a bill that would prevent the Federal Reserve (FED) from creating such a currency.

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The US House of Representatives has voted in favor of a bill that would block the creation of a central bank digital currency (CBNC) by the Federal Reserve (FED).

The poll, which took place on Thursday, May 23, highlights the future political and financial divisions of digital currency in the United States, largely on a partisan basis.

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The bill, the Anti-CBDC Surveillance State Act, passed by a vote of 216 to 192. Three Democrats joined Republicans in supporting the bill, while 192 Democrats opposed it. The bill was introduced in September 2023 by Representative Tom Emmer.

Supporters of the bill have expressed concern over the potential for increased government surveillance by the MNBC. They say the central bank's digital currency could give the central government the ability to monitor individuals' transactions and control their financial activities.

Maxine Waters, the ranking Democrat on the House Financial Services Committee, criticized the bill as “anti-innovation.” He also emphasized that the Federal Reserve is yet to take a final decision on the formation of MNBC.

Federal Reserve Chairman Jerome Powell told lawmakers in March that the Fed was “not close” to recommending or adopting an MNBC.. He also emphasized that if the central bank creates an MNBC, it will do so through the existing banking system.

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Even if the bill passes in the House, it is unlikely to pass in the Senate, which has a majority of Democrats. Additionally, the Federal Reserve has already indicated that it will not issue MNBCs without Congressional approval.

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Potential impact of inhibiting MNBCs

The House vote highlights debates about the future of digital currency in the United States. Proponents of MNBCs highlight their potential advantages in solvency and financial inclusion. Opponents fear a loss of government oversight and control of the currency.

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This anti-MNBC bill could have bigger implications than the US central bank banning digital currency. TD Cowen, a US-based investment bank, has warned that the ban could harm US banks and the global dominance of the US dollar.

According to TD Gowan, a ban on MNBCs in the US would give the euro or other digital currencies an advantage in international trade. The dollar as we know it today may lose value against other fiat currencies.

The debate over MNBC is likely to continue in the coming years as central banks and governments around the world examine the potential benefits and risks of this new monetary technology.

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Source: Prohibition

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