U.S. Rep. Tom Emmer (R-MN) introduced legislation that would prevent the Federal Reserve from issuing a central bank digital currency (CBDC).
Specifically, the Anti-CBDC Surveillance State Act would prohibit the Federal Reserve from issuing a CBDC directly to individuals, or indirectly through an intermediary or third party. Further, it would prevent the Fed from using any form of CBDC as a tool to implement monetary policy.
In addition, the bill also ensures the Treasury Department cannot direct the Federal Reserve Bank to design, build, develop, establish, or issue a CBDC. Finally, it also requires explicit Congressional authorization to issue any CBDC.
“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,” Emmer, the Majority Whip, said. “President Trump understands the dangers CBDCs present and has already issued an executive order prohibiting federal agencies from exploring one. Now, we must codify this executive order in law and permanently ban their development so a future administration cannot weaponize this technology against Americans.”
A CBDC is a digital form of sovereign currency that is designed and issued by a government and transacts on a digital ledger that that government controls.
The bill has the support of several associations and groups, including America’s Credit Unions.
“Whip Emmer’s legislation protects consumer privacy and financial stability by preventing the Federal Reserve from issuing a central bank digital currency (CBDC),” Carrie Hunt, chief advocacy officer of America’s Credit Unions, said. “A CBDC could disrupt credit unions and retail deposits and expand government. The risks of a CBDC outweigh any potential benefit and could otherwise distract the Federal Reserve from its dual mandate of achieving both stable prices and maximum employment. America’s Credit Unions looks forward with working with Whip Emmer to get this commonsense legislation passed and keep the Fed focused on its core mission.”