This bill has just passed the US House of Representatives. Why is this important?
Today, we have Visa and Mastercard as our choice of digital payment. Some have floated crypto as an alternate, but crypto is complicated and not backed by an economy or central bank. Others have floated the idea of a central bank digital currency (CBDC) that matches the availability of Mastercard and Visa, but do not go through their services. It could also be used offline with smart devices.
Some critics have cited concerns over privacy, where the central government could collect information, while others have pointed out that Visa and Mastercard collect that sort of data anyways, and CBDCs might log less data if designed differently.
The point may soon become moot if the bill passes the Senate and receive the president’s signature
My take on this bill is that it’s a ban that should not be put into place. CBDC can still be issued to banks though, just not for you and me. It keeps Credit card companies able to charge high merchant fees.
If I were to write a bill on CBDC, I would put in privacy restrictions into the bill, but still allow for individual CBDC to be issued.
There’s a big difference between the two though. Usually in the US, we have transactions in dollars. Whether by credit cards or cash.
With crypto, you have to go to an exchange, and set up payment devices. Then the other person would have to set up that too. Monero trades availability for privacy and sanctions relief
A CBDC wouldn’t really compete with Monero. It would compete with things like PayPal where it’s still in dollars.