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On September 20, the CBDC Anti-Surveillance State Act was approved by the Financial Services Committee. Republican Senator Tom Emmer remarked that it was,
“A historical step in defending against an ever-expanding government surveillance state.”
The House Majority Whip has been opposing the Federal Reserve’s initiatives to create a CBDC.
Anti-CBDC Bill Advances
This Act represents the first anti-CBDC legislation presented in the United States. Senator Emmer initially introduced the CBDC bill in January 2022, with a formal submission to Congress occurring in February 2023.
The main objective is to restrict the Federal Reserve from issuing a programmable CBDC, which Emmer asserts is a “surveillance tool that would be used to undermine the American way of life.”
The bill has garnered support from 60 members of Congress and various industry groups, according to Emmer.
He cautioned that a CBDC differs significantly from decentralized digital currencies, as it operates on a digital ledger that is designed and managed by the government.
“In short, a central bank digital currency is a government controlled programmable money, if not designed like cash, could give the federal government the ability to surveil and restrict American’s transactions.”
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Senator Emmer pointed to China as an instance where this is already occurring. The ruling communist party has developed a CBDC to monitor the spending behaviors of its citizens, which has been utilized to establish a social credit system that rewards or penalizes individuals based on their actions.
He also referenced the Canadian government’s freezing of bank accounts belonging to protesters during the 2020 trucker protests. “That might work in Canada, it doesn’t work here,” he remarked before concluding:
“If not open, permissionless, and private like cash, a CBCD is nothing more than a CCP-style surveillance tool that can be weaponized to oppress the American way of life.”
Fed CBDC Restrictions
The bill explicitly forbids the Federal Reserve from issuing a CBDC to individuals. Senator Emmer stated that this would stop the central bank from evolving into a retail bank capable of gathering personal financial information.
The legislation also prevents the central bank from utilizing any CBDC to carry out monetary policy.
The bill will now proceed to a full vote in the House. If approved, the Democrat-controlled Senate would also need to consider the issue, and many members, including those strongly opposed to crypto, are against it.
Additionally, US presidential candidate Robert F. Kennedy Jr. aligns with the principles set forth in Senator Emmer’s bill. “That is why I oppose CBDCs, which will vastly magnify the government’s power to suffocate dissent by cutting off access to funds with a keystroke,” he stated in May.
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