U.S. CBDC Anti-Surveillance State Act advances to a full House vote
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(Kitco News) - The CBDC Anti-Surveillance State Act, a bill introduced by U.S. House of Representatives Majority Whip Tom Emmer (R-MN) that seeks to prevent the issuance of a digital dollar, has been passed out of the House Financial Services Committee and will now progress to a full congressional vote.
According to a press release from Emmer’s office, “The bill was passed out of the Committee and reported favorably to the House floor during the markup session, an important step toward passing this legislation through Congress.”
“This bill is simple: It halts the efforts of this Administrative State under President Biden from issuing a financial surveillance tool that will undermine the American way of life,” Emmer said during the Wednesday hearing.
“A central bank digital currency [CBDC] is 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. We’ve already seen examples of governments weaponizing their financial system against their citizens.”
He gave the example of the Community Party in China using their CBDC to track the spending habits of its citizens and reinforce a social credit system that rewards or punishes people based on their behavior.
“This appetite for financial surveillance may be gaining a stronghold, unfortunately, right here at home,” he warned. “The Biden Administration is not only itching to create a CBDC, but they are willing to trade American’s right to financial privacy for a surveillance-style central bank digital currency. We’re not going to let this happen.”
Emmer said he crafted the bill to ensure the digital currency policy in the U.S. “is in the hands of the American people – not the Administrative State – so that it reflects our American values of privacy, individual sovereignty, and free market competitiveness.”
“If not open, permissionless, and private – just like cash – a central bank digital currency is nothing more than a CCP-style surveillance tool that can be weaponized to oppress the American way of life,” he said. “If China embraces it, you know it’s something worth standing against in this country.”
Emmer noted that the bill has already received support from 60 members of Congress, and the next step after passage out of the House Financial Services Committee will be a full vote in the House of Representatives.
While the Act successfully passed out of the Financial Services Committee, not all its members approved of the bill, including the Committee’s top Democrat, Maxine Waters (D-CA).
“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 during the Wednesday hearing. “I am disappointed that Republicans have taken such a deeply anti-innovation stance.”
“At this point, nobody fully understands the potential benefits and challenges of CBDCs or how their implementation could affect the preeminence of the U.S. dollar and global finance more broadly,” she added. “That is why the Biden administration and the Federal Reserve are researching this.”
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The CBDC Anti-Surveillance State Act was first introduced by Emmer in January 2022 and had 49 original co-sponsors. It was formally introduced to Congress in February, and Emmer reintroduced the legislation in the House of Representatives on September 14.
The bill contains provisions that prohibit the Federal Reserve from issuing a CBDC directly to individuals, ensuring the central bank cannot transform itself into a retail bank able to collect personal financial data on Americans.
It also prohibits the Fed from indirectly issuing a CBDC to individuals through an intermediary, or using any CBDC to implement monetary policy, ensuring the Federal Reserve cannot use a CBDC as a tool to control the American economy.
Last Thursday, the House Financial Services subcommittee held a hearing entitled, “Digital Dollar Dilemma: The Implications of a Central Bank Digital Currency and Private Sector Alternatives,” during which five expert witnesses were called to testify on the pros and cons of a digital dollar. For the most part, they argued against the creation of a digital dollar and instead touted the creation of private-sector alternatives to CBDCs.