US House Committee turn to DoJ for CBDC development as SWIFT resolves cross-border transfer hurdle

• In a letter, the House Financial Services Committee (FSC) asked the Department of Justice (DoJ) for their CBDC assessment.
• The House Committee analyzed whether the Federal Reserve has the authority to issue a CBDC without authorizing legislation.
• SWIFT stated it had the necessary connections to become the standard for cross-border CBDC transactions.

Central Bank Digital Currencies (CBDC) have been the talk of the crypto town for a while now. While many countries, such as China, Nigeria, etc., have already launched their CBDCs, the likes of the US are still figuring it out. Thus to forward this effort, representatives of the House Financial Services Committee have taken a step.

FSC goes to DoJ for CBDC

The House Committee members published a letter sent to the Department of Justice highlighting their request for CBDC assessment and legislative proposals. 

Dated October 5, the letter asked for the DoJ to share their assessment of whether or not legislative changes would be necessary to issue a CBDC. The DoJ was asked to report on the same by President Biden’s executive crypto order back in March.

The Committee also spent a significant amount of resources weighing the risks as well the benefits that would come with a CBDC. In its letter, the FSC stated,

“The Committee’s review has included analyzing whether the Federal Reserve has the authority to issue a CBDC without authorizing legislation. Committee Republicans emphasized in our CBDC principles that the Federal Reserve does not have the legal authority to issue a CBDC absent action from Congress.”

As per the letter, the DoJ has only ten days to reply to the request setting the deadline at October 15.

On the other hand…

As US authorities continue to seek an optimal solution, SWIFT has single-handedly suggested the solution to the impending CBDC problem. Thanks to its network of 11,500 Central Banks across 200 countries, SWIFT can act as the medium of cross-border payments. SWIFT aims to become the standard of CBDC transfers.

In a statement on October 5, SWIFT said,

“SWIFT has successfully shown that Central Bank Digital Currencies (CBDCs) and tokenised assets can move seamlessly on existing financial infrastructure – a major milestone towards enabling their smooth integration into the international financial ecosystem,”

Going forward, SWIFT might play a huge role in this space.

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