Majority Whip Tom Emmer (MN-06) has reintroduced a bill that would prevent the Federal Reserve from issuing a central bank digital currency (CBDC). Fifty original cosponsors, including members of the Financial Services Committee, are supporting the bill, according to a press release.
Emmer said a CBDC could infringe on Americans' right to financial privacy, saying that unlike decentralized cryptocurrencies like Bitcoin, CBDC transactions are tracked on a digital ledger controlled by the government, according to a press release.
“If not designed to be open, permissionless and private – emulating cash – a government-issued CBDC is nothing more than a CCP-style surveillance tool that would be used to undermine the American way of life,” Emmer said.
David McIntosh, president of the Club for Growth, cautioned that a CBDC could make the U.S. more like China, according to the press release.
“Two world visions for the future of digital currencies are in conflict: China and a Central Bank Digital Currency (CBDC) where government creates digital assets and surveils, spies, monitors and restricts consumer behavior versus an American free marketplace that enables private competition that protects consumer data, allows economic freedom, enables innovation and encourages competition," McIntosh said in a statement. "Club for Growth is pleased to work with House Majority Whip Tom Emmer, so America doesn’t go down the China road and the Federal Reserve never develops a CBDC."
China has been developing its CBDC, the digital yuan or e-CNY, since 2014, according to a report from the Foreign Policy Research Institute. The report said that although the People's Bank of China has said that the digital yuan allows "anonymity for small amounts" and guarantees “reasonable personal information protection needs of the public," China's cybersecurity laws enable the government to attain data from any Chinese entity.
"In reality, anonymity is actually conditional and ambiguous," the report said.
Emmer's bill would bar the Federal Reserve from issuing a CBDC to individuals either directly or through intermediaries, and it also prohibits the Fed from using CBDC in monetary policy, according to the press release. He originally introduced the bill in January 2022.
