Bipartisan legislation sponsored on May 25 by U.S. Rep. French Hill (R-AR) would support the role of the United States dollar as the world’s primary reserve currency, as it has been since World War II.
The 21st Century Dollar Act, H.R. 3506, which Rep. Hill introduced with original cosponsor U.S. Rep. Jim Himes (D-CT), would require the U.S. Treasury Department to coordinate with the Federal Reserve on implementing a strategy to ensure the American dollar remains the primary global reserve currency, which is held by central banks around the world in large quantities and is used to conduct international trade and financial transactions, according to information provided by Rep. Hill’s office.
“This is good for American companies and workers, as well as U.S. global influence,” Rep. Hill said. “I am proud to work with my good friend and colleague, Chairman Himes, on this effort — especially timely now as China seeks to spread its influence around the world through predatory lending practices.”
If enacted, H.R. 3506 also would call for open and transparent financial markets; ongoing improvements to domestic and international payment methods that use dollar transactions; sound macroeconomic governance and a rules-based system of international trade; and clear objectives in the deployment of financial restrictions arising from national security considerations, according to Rep. Hill’s information.
Additionally, H.R. 3506 would require that the Treasury Department and the Federal Reserve submit a report to Congress that would include any risks to the dollar posed by the internationalization of the renminbi, which is China’s official currency.
“Congress and policy makers need to understand the risks posed to the dollar, especially as it relates to China’s renminbi, to ensure the safety and preeminence of the dollar,” said Rep. Hill.