![]() ![]() Such notes shall be in form and tenor as directed by the Secretary of the Treasury under the provisions of this chapter.” Only a single regulation cites to this statute, and describes the “distinctive paper” used in dollar bills. Thus, the Secretary of the Treasury is directed by statute to “cause plates and dies to be engraved in the best manner to guard against counterfeits and fraudulent alterations, and shall have printed therefrom and numbered. It is against this backdrop that Congress authorized the creation of Federal Reserve notes. First of all, in 1913, as noted, various forms of paper notes and certificates were already in circulation - United States Notes, National Bank Notes, Gold Certificates, Silver Certificates, and Treasury Coin Notes. The context of the Act, as well as other statutes, makes clear that “Federal reserve notes” are paper currency. Section 16 of the Federal Reserve Act granted the Federal Reserve the authority to issue one form of United States currency: “Federal reserve notes.” The Federal Reserve Act of 1913 was intended to, among other things, “furnish an elastic currency.” However, “currency” is not defined by the Act. “continued to experience money-related economic and banking crises, as the supply of these currencies could not expand or contract to meet economic conditions.” The Role and Authority of the Fed All told, by the end of the 19th century, there were five forms of paper currency circulating in the U.S. For example, in 1861, Congress authorized the Treasury to issue the first paper currency, referred to as “Demand Notes.” Other legislation followed. NotesĬongress enacted a series of laws beginning in 1861 authorizing the Treasury to issue various paper currencies. half dollars or 50-cent pieces, quarter dollars or 25-cent pieces, and dimes or 10-cent pieces in such quantities as he may determine to be necessary to meet the needs of the public.” The Secretary of the Treasury possesses this authority today. In the Coinage Act of 1965, the Secretary of the Treasury was explicitly given authority to “coin and issue. Various Coinage Acts followed over the years, changing the composition and ratios of gold and silver in U.S. During the early 19th century, depositors such as banks supplied the silver and gold for coining and chose which coins they wanted back, preferring the largest denominations. ![]() ![]() Free minting privileges were granted to all citizens, whereby, citizens could take either gold or silver to the mint and have it minted into coins. had seen the bills issued by the Continental Congress to finance the American Revolution-called “continentals”-become virtually worthless by the end of the war.” In 1792, Congress passed the Coinage Act, which provided for a United States mint where silver dollars were coined along with gold coins beginning in 1794. In the Constitution, the Founders provided Congress with the power “to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.” They said nothing about paper money, “largely because. Many who have proposed various forms of a United States CBDC have not addressed this question others have raised the question but not ventured an answer. ![]() This blog post will explore whether Congress’s role should be primarily to provide oversight as CBDC proceeds or whether legislation is legally required. Federal Reserve Chairman Jerome Powell recently recognized the significance of any decision on CBDCs noting that “we would not proceed with without support from Congress, and I think that would ideally come in the form of an authorizing law, rather than us trying to interpret our law to enable this.” An additional question that has not received much attention is who decides whether the U.S. Central banks around the world are weighing the question of whether to issue a central bank digital currency – both the technological question (can we) and the policy question (should we). ![]()
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