Seeing CBDC

When HFSC takes up digital assets later this week, its ostensible focus will be on whether the U.S. should have a CBDC.  However, given distress across the virtual-currency landscape, the focus will surely be broader.   Democrats will use the session to press hard for stablecoin standards, perhaps prompting Rep. Josh Gottheimer (D-NJ) to advance his draft before measures such as one pending from Sen. Toomey (R-PA) take precedence (see FSM Report CRYPTO27).  House Republicans will surely press the CBDC principles they reiterated last week to argue that stablecoins should be given far more of a chance than Democrats think sound.  We expect Members also to push and pull at the assumptions embedded in the Fed’s discussion draft (see FSM Report CBDC10) and at the benefits CBDC might or might not provide to financial inclusion and for cutting big banks down to the size progressives prefer.