From [HERE] The White House’s exploration of a government-backed digital dollar is raising an implicit question that has received little attention: What role does Congress have in the decision?

Federal Reserve officials, including Chairman Jerome Powell, have said the central bank wouldn’t issue a digital dollar without support from Congress, but that leaves open at least the possibility that the Fed could move forward with buy-in that falls short of legislation. And that, in turn, raises a new question: What would buy-in have to look like to satisfy the Fed?

“The definition of support is the piece that remains murky,” said Jennifer Lassiter, executive director of The Digital Dollar Project. “We know they're looking to the administration and to Capitol Hill for some type of concurrence or guidance to move forward, but we don't know what shape that takes.”

Congress’ role could prove decisive in a project that may profoundly change how Americans handle their financial affairs and that some see as essential to U.S. standing in the global financial system. Depending on how congressional support is expressed, it could undermine consumers’ confidence in a digital dollar, raise legal challenges that stop the project in its tracks or fail to deliver the stability the rest of the world has found in the dollar for decades.

In eight reports on digital assets released in September, the White House sidestepped the question of whether legislation is needed. The reports, done in response to President Joe Biden’s executive order in March, included two that examined potential technical designs and policy objectives of a government-backed digital dollar should it “be deemed in the national interest and pursued.” 

The administration, however, declined to release a Justice Department document commissioned by the same executive order assessing whether legislation would be needed to issue a digital dollar. The administration didn’t respond to questions about why the assessment was withheld or whether it will be made public in the future.

“It's kind of the missing piece to the puzzle in order to fully understand what the next step is,” Lassiter said in an interview. 

‘Bipartisan concern’

Members of Congress on both sides of the aisle, including some of the earliest supporters of a digital dollar, say the Fed should not issue a central bank digital currency without legislation clearing Congress first. 

The undisclosed Justice Department document didn’t escape the notice of members of Congress. A handful of House Republicans led by Financial Services ranking member Patrick T. McHenry, sent a letter this month to Attorney General Merrick B. Garland asking for a copy of the assessment. 

“I think there's bipartisan concern about it and an interest in better understanding these trade-offs,” McHenry, R-N.C., said in an interview. He and other committee Republicans also sent a letter to Fed Vice Chair Lael Brainard in September asking her to clarify whether legislation is needed.