U.S. Reps. Tom Emmer (R-MN) and Patrick McHenry (R-NC) were among a group of House Republicans that reached out to the head of the Federal Reserve Bank of Boston about an initiative to research the development of a central bank digital currency (CBDC).
The lawmakers expressed concern in a letter to Susan Collins, the president of the Boston Federal Reserve Bank, about the bank’s initiative, Project Hamilton. Project Hamilton is a collaboration between the Federal Reserve Bank of Boston and the Digital Currency Initiative at the Massachusetts Institute of Technology. The goal is to research the potential development of a central bank digital currency (CBDC) in the United States.
“The more we learn about the Boston Fed’s work on Project Hamilton, the more we have become concerned with the lack of transparency, especially as it relates to their partnership with the private sector. The unfair advantage that some private companies could enjoy from this partnership and the failure to ensure the principles of privacy, sovereignty, and free markets should be concerning to every American,” Emmer, ranking Republican on the House Financial Services Subcommittee on Oversight and Investigations, said.
The lawmakers stated that if the CBDC is not crafted with the values of transparency in mind, the currency falls at risk to the financial privacy violations currently on display in China.
“Any U.S. CBDC must be open, permissionless, and private,” Emmer added.
Specifically, the letter asks about the project’s funding and engagement with the private sector in developing a CBDC. The lawmakers also inquire about how the Fed plans to address concerns that many have regarding the dangers a CBDC could pose to financial privacy and financial freedom. These topics were the subject of over 65 percent of the letters in response to the Fed’s January 2022 report on CBDCs.
Emmer and McHenry, ranking member on the House Financial Services Committee, were joined on the letter by House Financial Services Committee members Ann Wagner (R-MO), Ted Budd (R-NC), Bill Huizenga (R-MI), Andy Barr (R-KY), French Hill (R-AR), Anthony Gonzalez (R-OH), and Warren Davidson (R-OH).