By George Ward
The United States congress members jointly penned a petition to the Federal Reserve Bank of Boston seeking clarification over private firms’ involvement in the potential development of the US Central Bank Digital Currency (CBDC).
The letter argued that most private firms would take undue advantage of their involvement in the project. The letter added that these private firms might use their knowledge to research, build and scale CBDC-related products to sell to commercial banks.
Furthermore, lawmakers, including Tom Emmer and Patrick McHenry, stated that there is no transparency by the US Fed regarding the role of these private firms in the CBDC project.
In addition, demanded written responses regarding the questions highlighted in the petition believing it would bring more clarity to the partnership memorandum.
Therefore, the Federal Reserve Bank of Boston would have to clarify the extent of its partnership with private firms. It needs to explain whether financial agencies are solely responsible for funding private sector startups that have indicated an interest in developing CBDCs.
In addition, the lawmakers requested to know if these private companies’ involvement in the project development would have regulatory advantages over their rivals. They also want to know what the project would do about the security and privacy concerns of CBDCs.
Lawmakers Outline Partnership Threshold
Meanwhile, the lawmakers noted that it is important for companies intending to be involved or already involved with the CBDC project not to have any unjust competitive dominance over their competitors now or in the future.
They added that neither the Federal Reserve Bank nor the Federal Government should be in charge of selecting winners or losers in the private market sectors. In his comment on the development, Congressman Emmer commended the collaboration between the Federal Reserve Bank of Boston and MIT to research the development of a US CBDC.
However, he stated that the role of private companies must be transparent with no interference from government bodies.