The tide has turned in the crypto market.
Today, the price of bitcoin has fallen 4%. The price of the second largest crypto, ethereum, is down 3.5%. Meanwhile, BNB’s price fell 1.9%, Cardano 3.3%, XRP 3.4%, and Solana 4.9%.
However, a major catalyst is brewing that could reverse cryptocurrency prices.
As the Fed continues its crypto investigation into a digital dollar – which would create competition for major cryptocurrencies, such as bitcoin, ethereum, solana, XRP and BNB – a congressman seeks to ban the currencies government-issued digital cameras.
Last Wednesday, Republican Representative for Minnesota, Tom Emmer, introduced a bill that would curb the Fed’s powers to issue digital currency directly to American citizens, which he said would put the nation on a path authoritarian.
“Requiring users to open an account with the Fed to access a US CBDC would put the Fed on an insidious path akin to China’s digital authoritarianism,” he said in a statement. “It is important to note that the Fed does not, and should not have the authority to offer retail bank accounts.
Although Fed Chairman Jerome Powell has said cryptos could coexist with cryptocurrencies issued by the central bank, the congressman argues that a CBCD would allow the Fed to monitor Americans, which goes to the defeats the whole purpose of a decentralized cryptocurrency.
“CBDCs that do not adhere to these three basic principles could allow an entity like the Federal Reserve to mobilize in a retail bank, collect personally identifiable information about users and track their transactions indefinitely,” he said. he declared.
Zoom out
Last July, the Fed launched an investigation into whether it should introduce its own digital currency.
“We think it’s really important that the central bank maintains a stable currency and payments system in the public interest. It’s one of our jobs, ”said Fed Chairman Jerome Powell. He later noted that this involved “transformational innovation” in digital payments, referring to the cryptocurrency revolution.
The Fed gave no timetable and hinted it would not rush. “I think it’s important that we come to a place where we can make an informed decision about it and do it quickly… I don’t think we’re late. I think it’s more important to do it right than to do it quickly, ”Powell said in his press conference after the meeting.
The Fed has not made a decision yet, but on Tuesday, Powell told a US Senate committee that they would release the central bank’s highly anticipated digital currencies report “in a few weeks.”
Look ahead
Government-backed cryptocurrencies are gaining momentum around the world.
Right now, 87 countries (which account for over 90% of global GDP) are planning to launch their own cryptocurrencies, according to the Atlantic Council. 14 are in the testing phase, including China, and nine have already been launched, with Nigeria introducing the latest.
Meanwhile, countries with the largest central banks–the United States, Japan, the euro zone and the United Kingdom are falling behind.
The adoption of central bank-issued digital currencies among major economies is a development closely watched by crypto investors, as it is not yet clear how they would affect major cryptocurrencies.
Jerome Powell believes currencies issued by the central bank would render cryptocurrencies useless. “You wouldn’t need stable coins; you wouldn’t need cryptocurrency if you had an American digital currency, ”Powell said at a congressional hearing last July.
Others believe that a digital dollar would have the opposite, counterintuitive effect. Greg King, the founder and CEO of Osprey, says it would spark a backlash against privacy concerns and push more people towards decentralized cryptocurrencies.
In an interview with CNBC after Powell’s remarks, King said, “Imagine the world’s fiat currencies being digitized. I actually think it pushes more people into something like bitcoin because, frankly, it would give Governments have even more control over their money supply than they already have, and many people are going into bitcoin over concerns about this type of control.
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