Democratic Lawmakers Criticize Cryptocurrency, Advocate for CBDC Development

According to Cointelegraph, U.S. Democratic lawmakers have labeled cryptocurrency as a "scam" during a press conference held on Wednesday, advocating for the establishment of a central bank digital currency (CBDC). Representative Maxine Waters criticized the CBDC Anti-Surveillance State Act, a proposed bill aimed at preventing the creation of a government-controlled digital dollar, referring to it as the "anti-innovation act." She expressed concerns that both the anti-CBDC bill and the GENIUS stablecoin bill pose threats to national security. Representative Stephen Lynch, who was also present at the event, stated that cryptocurrency lacks any legitimate use case. He remarked, "As a committee, we've learned that there is no legitimate use case for cryptocurrency, as of yet, unless you count the illegal practices of every single ransomware heist that has affected US businesses, which have been fueled and facilitated by cryptocurrency." Lynch further described cryptocurrency as a "highly risky and volatile product" that does not belong in a well-regulated financial system, labeling the entire industry as a scam. In January, U.S. President Donald Trump signed an executive order banning CBDCs. The debate over CBDCs continues as countries remain divided on their adoption. In February, Federal Reserve Chair Jerome Powell testified at a Senate hearing, stating that the central bank would not develop a CBDC during his tenure. Meanwhile, other nations are progressing with the digitization of their fiat currencies, often citing the need to keep their currencies competitive in the digital age while maintaining sovereign control and avoiding reliance on third-party stablecoin companies. Despite these developments, most Americans either oppose the adoption of a CBDC or remain undecided. Internationally, the Reserve Bank of India announced plans in May to expand its CBDC test trials, focusing on new use cases for its digital rupee. In July, Australia's central bank revealed intentions to test wholesale CBDCs in a closed experiment with select institutions. Conversely, Bank of England Governor Andrew Bailey recently argued against the issuance of a CBDC by the UK's central bank, suggesting it could destabilize the banking system. Instead, Bailey recommended that the Bank of England should concentrate on tokenizing deposits.