Following deliberations on Wednesday, Republicans in the House Financial Services Committee have advanced a bill to stop the Federal Reserve from directly issuing CBDCs to individuals.
Rep. Tom Emmer, R-Minn, introduced the “CBDC Anti-Surveillance State Act,” HR 5403, last week, seeking to bar the Fed from issuing a CBDC to individuals, as well as stop the issuing through a third party.
The bill supported by 50 other Republicans faced a lot of pushback from Democrats Maxine Waters and others, but has succeeded in proceeding to the full house.
“I’m extremely proud to have this legislation, that frankly I’ve been working on for three years at least,” Emmer told his colleagues on Wednesday.
“In short, a central bank digital currency is a government controlled programmable money that, if not designed to emulate cash, could give the federal government the ability to surveil and restrict Americans’ transactions,” he said. “This is not just alarming — it’s downright un-American.”
Waters, who used to lead the House Financial Services Committee, had at the sitting expressed disappointment at the Republicans for supporting such a bill, which she referred to as anti-innovation.
“The Republican bill before us today would stifle that research and prevent us from moving forward even if it means that the dollar loses its status as the world’s reserve currency and even if it means that U.S. citizens lose out on faster, cheaper and simpler payments,” Waters said on Wednesday. “I am disappointed that Republicans have taken such a deeply anti-innovation stance.”
The anti-CBDC bill finally succeeded in progressing to the next stage, but not without a fight from the Democrats on the committee.
“With all due respect, this bill is an act of breathless stupidity,” said Rep. Stephen Lynch, D-Mass. “We’re at an inflection point right now, but this bill would take the U.S. out of the game,” he added.
The bill however received support from the blockchain association as one of the bodies standing against a CBDC in the U.S. The association said on Wednesday that a CBDC comes with “major privacy concerns, such as the government’s ability to track purchases.
“The right to financial privacy is protected by the Constitution. We support the CBDC Anti-Surveillance State Act – legislation aimed at preventing a CBDC from being issued in the United States,” the association said.
The Battle Ahead
Though the Republicans have won overwhelmingly at the committee level, there’s still more to be done. Even if it passes at the generally assembly, may still get rejected at the senate by Democrats should they outnumber the Republicans.
The house has advanced other important bills this year, including the one to change crypto regulation in the country, and another for the regulation of stablecoins, which Republicans accused the Fed of attempting to sabotage.