'CBDC Anti-Surveillance State Act' introduced in an effort to limit the Fed's authority over a digital dollar
Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!
(Kitco News) - Tom Emmer, a member of the U.S. House of Representatives from the state of Minnesota and Republican Majority Whip, has introduced a new piece of legislation that could prevent the Federal Reserve from directly issuing a central bank digital currency (CBDC).
Emmer announced the new legislation via Twitter on Wednesday, posting a screenshot of the bill entitled ‘CBDC Anti-Surveillance State Act’, which was crafted “to halt efforts of unelected bureaucrats in Washington, DC from stripping Americans of their right to financial privacy.”
The text of the bill states that it seeks “To amend the Federal Reserve Act to prohibit the Federal reserve banks from offering certain products or services directly to an individual, to prohibit the use of central bank digital currency for monetary policy, and for other purposes.”
The bill does three things:— Tom Emmer (@GOPMajorityWhip) February 22, 2023
1. Prohibits the Fed from issuing a CBDC directly to anyone.
2. Bars the Fed from using a CBDC to implement monetary policy and control the economy.
3. Requires the Fed's CBDC projects to be transparent to Congress and the American people
“Except as specifically authorized under this Act, a Federal reserve bank may not offer products or services directly to an individual, maintain an account on behalf of an individual, or issue a central bank digital currency directly to an individual,” section two of the bill reads.
Section three of the proposed bill looks to amend Section ten of the Federal Reserve Act by inserting the following paragraph before paragraph 12 in the Act: “Prohibition on the use of central bank digital currency for monetary policy. – The Board of Governors of the Federal Reserve System and the Federal Open Market Committee may not use any central bank digital currency to implement monetary policy.”
Section four directs the Board of Governors of the Federal Reserve System to consult with each Federal Reserve bank regarding any CBDC studies or pilot programs and to issue quarterly reports to Congress on any findings and determinations generated by such programs.
In a follow-up tweet, Emmmer said “Any digital version of the dollar must uphold our American values of privacy, individual sovereignty, and free market competitiveness. Anything less opens the door to the development of a dangerous surveillance tool.”
In the event that the bill is approved by both the House and the Senate and gets signed into law by President Joe Biden, the Federal Reserve Act would be amended to include the limitations on the Fed’s authority in regard to the digital dollar.
|Blockchain Association wants crypto to fight regulators through Congress and the courts|
Emmer concluded his post by saying, “America remains a technological leader not because we force innovations to adopt our values under regulatory duress, but because we allow technology that holds these values at their core to flourish.”
The Minnesota Representative is considered by many to be a friend of the crypto industry and he has repeatedly called for the government to scale back regulation in order to promote innovation in the industry. In December, he tweeted that Securities and Exchange Commission chair Gary Gensler “must testify before Congress and answer questions about the cost of his regulatory failures.”
Emmer previously introduced a similar bill in January 2022 – when Republicans held a minority in the House – and warned that having the Fed require users to open accounts to access the benefits of a digital dollar would put the central bank “on an insidious path akin to China’s digital authoritarianism.”