The House Financial Services Committee has approved legislation aimed at preventing the Federal Reserve from developing a central bank digital currency (CBDC), with lawmakers voting 27-22 to advance the CBDC Anti-Surveillance State Act.
Led by Representative Tom Emmer (R-MN), the bill prohibits the Federal Reserve from issuing a digital dollar either directly or through intermediaries. The legislation also blocks the use of such currency as a monetary policy instrument.
During committee discussions, Rep. Emmer emphasized privacy protection concerns, drawing a clear distinction between decentralized cryptocurrencies like Bitcoin and a potential government-controlled digital dollar. "A CBDC could give the federal government unilateral authority to surveil Americans' transactions and restrict politically unpopular activity," Emmer warned.
The bill's supporters point to international examples, including China's digital yuan surveillance capabilities and Canada's 2022 freezing of protestor bank accounts, as cautionary tales of government overreach through digital currencies.
Unlike private cryptocurrencies operating on decentralized networks, a CBDC would function on a government-controlled ledger system. Critics argue this design could enable authorities to monitor spending patterns and potentially implement restrictions on how citizens use their money.
This marks continued momentum for the legislation, which previously passed the House of Representatives during the 118th Congress. The bill originated from Emmer's initial proposal in January 2022 to ban CBDCs.
The vote reflects growing resistance among lawmakers and privacy advocates who view a potential digital dollar as a threat to financial privacy and individual freedom. As the bill moves forward, it underscores the ongoing debate between technological innovation in currency and protecting citizens' financial privacy.