Republican-Led Effort to Block US Central Bank Digital Currency Moves Forward

CBDC Anti-Surveillance State Act Passes US House Financial Services Committee

A Republican-led effort to prevent the creation of a U.S. central bank digital currency (CBDC) moved forward on Wednesday, as the CBDC Anti-Surveillance State Act passed out of the US House Financial Services Committee with a 27-22 vote.

Sponsored by Rep. Tom Emmer (R-MN), the bill seeks to prevent the Federal Reserve from issuing a digital dollar, citing concerns over financial surveillance and the transformation of the central bank into a retail banking entity.

Bills Provisions

The bill bars the Fed from indirectly deploying a CBDC through intermediaries and explicitly blocks it from using digital currency as a tool for monetary policy.

Emmer’s Concerns

Emmer spoke in support of the bill during the markup session, telling the Chairman that the government should never be involved in the business of creating tools for financial surveillance.

“Unlike decentralized cryptocurrencies, such as Bitcoin, a CBDC is a digital form of sovereign currency that is issued, monitored, and managed by a central bank,” he said. “In short, a CBDC is government-controlled programmable money that, if designed without privacy protections of cash, could give the federal government unilateral authority to surveil Americans’ transactions and restrict politically unpopular activity.”

Critics Warn of Surveillance and Control

Critics—and Emmer is chief among them—warn that it could open the door to surveillance of how citizens spend their money and programmable features that could prevent individuals from spending their money how they wish.

Fierce Opposition to a Potential CBDC in the U.S.

Fierce opposition to a potential CBDC in the U.S. signals growing momentum among privacy hawks and crypto-friendly lawmakers who view a digital dollar as a Trojan horse for financial control.

Conclusion

The CBDC Anti-Surveillance State Act has passed out of the US House Financial Services Committee with a 27-22 vote, marking a significant step forward in the effort to prevent the creation of a U.S. central bank digital currency. The bill’s proponents argue that it will prevent the government from using a CBDC for financial surveillance and control, while critics warn of the potential risks and consequences of such a system.

FAQs

• What is a CBDC? A CBDC is a digital form of sovereign currency that is issued, monitored, and managed by a central bank.
• What is the purpose of the CBDC Anti-Surveillance State Act? The bill seeks to prevent the Federal Reserve from issuing a digital dollar and to bar the Fed from using digital currency as a tool for monetary policy.
• What are the concerns about a CBDC? Critics warn that a CBDC could be used for financial surveillance and control, and could prevent individuals from spending their money how they wish.
• What is the current status of the bill? The bill has passed out of the US House Financial Services Committee with a 27-22 vote.