In a U.S. Senate hearing by the Committee on Banking, Housing and Urban Affairs sub-committee on Economic Policy, former U.S. CFTC Chairman, Christopher J. Giancarlo called on the government to start its development of a Federal Reserve controlled digital dollar, in line with the technological progress in other industries and countries.
The meeting titled, US-China: Winning the Economic Competition, was chaired by Tom Cotton with various participants/witnesses focusing on the economic relationship between the two superpowers. In his statement to the commission, Giancarlo focused on the war of digital payment systems and currencies alluding to China’s accelerated developments in launching their central bank digital currency (CBDC).
The questions of a digital yuan have raised a geopolitical motive whereby, the U.S. dollar is at risk of losing its dominance over global financial deals. According to Giancarlo, the U.S. needs to counter and launch their own digital dollar to maintain control over global economic and political decisions.
However, it’s not only the geopolitical influence that the U.S. is missing out on. Technological advancements in payments and transferring value are catching on with the traditional systems becoming slow and expensive, and failure to implement new innovations could be devastating to its financial system.
“The United States must take a leadership role in this next wave of digital innovation or be prepared to accept that the innovation will incorporate the values of America’s global competitors,” he wrote on his Testimony to the subcommittee.
The Digital Dollar Project
Giancarlo founded the Digital Dollar Project earlier this year to promote a public-private partnership in the development of a US CBDC. Along with Accenture, Giancarlo recently proposed to the U.S. Senate that the development of a digital dollar would help the government to dictate and control the global reverse currency.
After three hearings in Congress, Giancarlo has kept his stance on starting pilot projects across the country on launching a CBDC. Explaining the pilot projects, Giancarlo emphasized the projects drawing up the innovativeness of the private sector and public capital to test various design options and specific approaches, technologies, and protocols. He said,
“It is because the development of a dollar CBDC is so important to the national interest that it must involve the private sector.”
In his closing remarks, Giancarlo calls on the U.S. to be the leader of technological innovation to prevent falling back to China’s digital yuan. He said,
“The launch of a US CBDC is a logical and critical next step to increase financial inclusion, enshrine democratic values in the future of money, drive societal and economic benefits, and future-proof the US dollar for generations to come.”