According to a recent Fox Business report, in a significant move to counter the growing momentum behind Central Bank digital currency (CBDC), House Majority Whip Tom Emmer is set to reintroduce the Central Bank Digital Currency Anti-Surveillance State Act.
The Republican-backed bill aims to thwart the Federal Reserve (Fed) and its member banks from issuing a digital version of the US dollar and leveraging it for monetary policy implementation.
Clash Over CBDC Issuance Sparks Political Showdown
The global interest in the digital form of a country’s fiat currency has surged over the past few years, with as many as 130 countries, accounting for 98% of the global economy, exploring the possibility of digitalizing their currencies.
11 nations, including China, have already fully implemented Central Bank digital currencies. However, CBDCs have sparked controversy among cryptocurrency enthusiasts and conservatives despite falling under the broader category of digital assets.
On this note, the Biden administration has no plans to issue a digital version of the US dollar. However, GOP lawmakers remain skeptical due to the Federal Reserve’s initial steps, such as research and pilot programs, exploring the possibility of implementing a CBDC.
CBDCs have already become a talking point among Republican presidential candidates for the 2024 elections, including Ron DeSantis and Vivek Ramaswamy. Democratic presidential hopeful Robert F. Kennedy Jr. has also condemned CBDCs, branding them as “instruments of control and oppression.”
Per the report, Emmer’s reintroduced legislation is an updated version of a bill he introduced earlier this year, reflecting the rapidly evolving digital asset policy landscape. Co-sponsored by 49 congressional Republicans, the bill incorporates two significant changes from its original text.
Firstly, it prohibits “intermediated CBDCs” – CBDCs issued by the Federal Reserve but managed by retail banks and other financial institutions instead of directly controlled by the Fed. This resembles the model adopted by China for its digital yuan.
Secondly, the new version removes the requirement for the Fed to report any Central Bank digital currency pilot programs or studies to Congress, with such matters being addressed in separate bills like Rep. Alex Mooney’s Digital Dollar Pilot Prevention Act.
Similar anti-Central Bank digital currency legislation has been introduced in the Senate, including Mike Lee’s No CBDC Act and Ted Cruz’s bill, which aim to prevent the Federal Reserve from directly issuing CBDCs to individuals.
However, given the Democrats’ control over the Senate and the White House, the chances of any anti-CBDC legislation passing this year appear slim. Nevertheless, Emmer’s supporters hope the bill will raise public awareness regarding the potential drawbacks associated with CBDCs.
Emmer expressed his concerns about the Biden administration’s stance, stating that it compromises the financial privacy rights of Americans in exchange for a surveillance-style CBDC.
He emphasized the importance of the legislation in curbing the power of unelected bureaucrats and ensuring that US digital currency policy upholds values such as privacy, individual sovereignty, and free-market competitiveness.
As the bill is reintroduced, a House Financial Services subcommittee hearing on CBDCs is scheduled for later this week.
Featured image from iStock, chart from TradingView.com
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