On February 22, Republican Congressman Tom Emmer of the US House of Representatives introduced a bill to ban the Federal Reserve (Fed) from issuing a central bank digital currency (CBDC).
The “CBDC Anti-Surveillance State Act” aims to protect the financial privacy of American citizens by prohibiting the creation of a CBDC by the Fed without prior review and approval from Congress.
Emmer argued that creating a CBDC could negatively impact financial privacy and individual freedom, as authorities and regulatory entities could use it as a tool to track and control citizens’ spending.
Today, I introduced the CBDC Anti-Surveillance State Act to halt efforts of unelected bureaucrats in Washington, DC from stripping Americans of their right to financial privacy. 👇 pic.twitter.com/lONbHFZMk7
— Tom Emmer (@GOPMajorityWhip) February 22, 2023
Emmer further explained that the bill prohibits the Fed from issuing a CBDC directly to anyone, prevents it from using a CBDC to implement monetary policy and control the economy, and sets the frame for more transparency on such projects.
The congressman clarified he is not opposed to technological innovation that could come with the creation of a CBDC. However, he maintained that these innovations should not infringe on citizens’ rights.
Financial Privacy Is a Priority
The creation of a CBDC could have a significant impact on financial privacy. Since CBDC transactions would be recorded on a blockchain, authorities could track and trace financial transactions in real-time. This has raised concerns about data privacy and surveillance and the potential for government intrusion into financial affairs.
However, proponents argue that CBDCs could bring many benefits, including greater financial inclusion, reduced transaction costs, and faster settlement times. Additionally, CBDCs could provide an alternative to traditional banking services for people who do not have access to them.
For several years now, Emmer has been an advocate of blockchain technology and cryptocurrencies, calling for regulation that encourages innovation and growth in the sector without harming people. Emmer is known for its efforts to boost crypto adoption and promote the growth of the industry.
He has been in favor of receiving part of his payment in crypto and has also expressed his concerns about the way the government handled the arrest of Sam Bankman-Fried. Coinbase has his name on the list of politicians who are “very supportive” of crypto.
China’s Dominance in CBDC Development
China has been at the forefront of CBDC development, launching a pilot program for its digital currency in 2020. While other countries have been exploring the possibility of issuing a such a product, China has taken the lead, conducting cross-border tests with countries such as the United Arab Emirates, Hong Kong, and Thailand, among others.
China’s digital yuan has been in development since 2014 and is already being used in 23 regions of the country, facilitating the transfer of over 100 billion yuan (approximately $15.5 billion). If it becomes globally accepted, it could become a significant competitor to the US dollar, giving China a greater presence in the global economic scenario.
While the US has been studying the possibility of launching its own CBDC, China’s dominance in the world of digital currencies continues to grow, with the potential to reshape the global financial landscape.