(Kitco News) – In the latest legislative development related to digital assets, the U.S. House of Representatives voted to prevent the Federal Reserve from issuing a central bank digital currency (CBDC), a move that sets the stage for a contentious battle in the Senate.
The CBDC Anti-Surveillance State Act, which was originally introduced by Majority Whip Tom Emmer (R-MN), looks to block the Fed from continuing its efforts to develop a digital dollar, a topic that has further divided the two sides of the political aisle.
Numerous Republicans have expressed concerns that a U.S. CBDC could be used to control Americans, and Presidential Candidate Donald Trump vowed that a digital dollar would not be issued if he is elected president.
Democrats pushed back against these concerns during the pre-vote debate, saying they were “overblown,” and suggesting that a ban would block public sector innovation and research.
As expected based on the pre-vote debate, the resulting tally largely fell along party lines, with 213 Republicans and three Democrats voting for the bill, while 192 Democrats voted against it.
This stands in contrast to the results of the vote for the Financial Innovation and Technology for the 21st Century Act, which took place on Wednesday and saw 71 Democrats join 208 Republicans in approving the measure.
“For more than two years, we have worked to educate, grow support, and pass this important legislation, which prevents unelected bureaucrats from issuing a financial surveillance tool to fundamentally undermine our American values,” tweeted Emmer. “My legislation ensures that the United States' digital currency policy remains in the hands of the American people so that any development of digital money reflects our values of privacy, individual sovereignty, and free market competitiveness.”
“This is what the future global digital economy needs,” he added. “We are proud to have led this effort and thank my colleagues for their support.”
While Emmer is proud to have his measure approved by the House, its fate is uncertain in the Senate, where it will face off with one of the country’s biggest digital dollar proponents, Senator Elizabeth Warren (D-MA).
Both FIT21 and the anti-CBDC bills could face months of inaction in the Senate as neither has a companion bill, and there is no time constraint on when senators must act on them.
Once arriving in the Senate, the bills will likely be assigned to a committee for possible rounds of reviews, hearings, and markups. After that is complete, it must receive majority support from at least 51 senators for it to pass.
