Legislation Introduced to Prevent Issuance of CBDC
House Majority Whip Tom Emmer (R-Minn.) reintroduced legislation on March 6 aimed at preventing the federal government from issuing a central bank digital currency (CBDC). Emmer argues that a CBDC could pose a threat to Americans’ financial privacy and lead to government overreach.
The Anti-CBDC Surveillance State Act
The Anti-CBDC Surveillance State Act seeks to explicitly ban the Federal Reserve from developing, issuing, or implementing a digital dollar. The bill prohibits the central bank from distributing a CBDC either directly to individuals or indirectly through financial intermediaries.
- Prevents the Fed from using any form of CBDC to influence monetary policy or track individual transactions
- Blocks the Treasury Department from directing the Fed to create a digital dollar
- Requires explicit congressional approval for any future development of a government-controlled digital currency
Emmer, a vocal opponent of CBDCs, believes that without proper design, a government-issued CBDC could serve as a tool for financial surveillance that undermines the freedoms associated with cash transactions. He stated, “If not designed to be open, permissionless, and private — resembling cash — a government-issued CBDC is nothing more than an Orwellian surveillance tool that would be used to erode the American way of life.”
Political Divide over CBDCs
The bill, with 100 Republican co-sponsors, reflects growing conservative opposition to a government-backed digital currency. Critics fear that a CBDC could enable federal agencies to monitor spending habits, freeze assets, or restrict transactions based on political or social considerations.
Supporters of CBDCs, including some policymakers at the Federal Reserve, argue that a digital dollar could enhance payment efficiency, financial inclusion, and maintain the competitiveness of the US dollar in the digital global economy.
Federal Reserve’s Stance
Federal Reserve Chair Jerome Powell has stated that the central bank would not proceed with a digital dollar without congressional approval. However, ongoing research and evaluation of a CBDC by the Fed have raised skepticism among Republicans.
This is not the first time Emmer has attempted to block a CBDC. He introduced a similar bill in January 2022, which became a focal point of his legislative agenda. Although the bill passed the Republican-controlled House in the previous Congress, it stalled in the Senate.
Given the current political landscape, the fate of the bill remains uncertain. However, its reintroduction suggests that CBDC opposition will continue to be a significant issue for Republicans leading up to the 2024 election and beyond.
