The US House of Representatives has approved a bill that prevents the Federal Reserve from issuing a central bank digital currency (CBDC) without explicit authorization from Congress. The CBDC Anti-Surveillance State Act was passed with a vote of 216-192, mostly along party lines.
A CBDC is a digital version of a currency issued by a central bank, in this case, the Federal Reserve. It would function similarly to physical currency. The Federal Reserve has stated that it currently has no plans to issue a CBDC and would not do so without congressional approval.
The bill reflects the concerns of Republicans, including former President Donald Trump, regarding the government’s intrusion into the personal finances of average Americans. House Majority Whip Tom Emmer, who introduced the bill, argues that a digital dollar could allow the federal government to monitor Americans’ transactions and suppress politically unpopular activities.
Emmer’s views align with those of Trump, who has pledged to block the creation of a CBDC if he is reelected. Trump stated at a rally in New Hampshire, “As your president, I will never allow the creation of a central bank digital currency. Such a currency would give our federal government absolute control over your money. They could take your money without you even knowing. This would be a dangerous threat to freedom.”
On the other hand, Representative Maxine Waters, a Democrat, argued that banning CBDCs could jeopardize the dominance of the US dollar. Waters stated, “We must be mindful of the potential risks of stifling innovation and limiting the competitiveness of our financial institutions, including the ability to adapt to new technologies.”
Federal Reserve Chair Jerome Powell has emphasized that the Fed is not currently considering the creation of a CBDC. In a speech to Congress in March, Powell mentioned that if the Fed were to explore the idea, it would be done through the existing banking system, as they do not intend to have individual accounts for all Americans.
The passage of the CBDC Anti-Surveillance State Act is seen as a positive development for the US crypto industry. Kristin Smith, the head of the Blockchain Association, described it as a “significant moment and a validation from Congress.”
This vote comes after the House passed the Financial Innovation and Technology for the 21st Century Act, a bill that enhances the Commodity Futures Trading Commission’s authority over cryptocurrencies and clarifies the role of the Securities and Exchange Commission. The crypto industry celebrated this as a sign of recognition and progress.
Overall, the passage of the CBDC Anti-Surveillance State Act and the recent crypto-related bills indicate a growing recognition and acceptance of the crypto sector in the United States.
