• Tom Emmer is reintroducing the Central Bank Digital Currency Anti-Surveillance State Act to counter support for CBDCs.

• Emmer’s updated bill prohibits “intermediated CBDCs” and removes the Fed’s obligation to report CBDC pilot programs.

House Majority Whip Tom Emmer plans to reintroduce the Central Bank Digital Currency Anti-Surveillance State Act as a significant response to the increasing support for Central Bank digital currency (CBDC). Republicans support this bill, which aims to prevent the Federal Reserve (Fed) and its affiliated banks from creating a digital form of the US dollar and using it to execute monetary policy.

The worldwide fascination with CBDCs has surged in recent years, with approximately 130 countries, accounting for a staggering 98% of the global economy, exploring the digitalization of their national currencies. While 11 nations, including China, have successfully implemented CBDCs, these digital assets have generated considerable controversy.

Biden Administration’s Stance

The Biden administration has made it clear that it has no intentions of issuing a digital version of the US dollar. However, GOP lawmakers remain wary due to the Federal Reserve’s initial steps, including research and pilot programs, aimed at exploring the possibility of introducing a CBDC.

CBDCs have become a hot topic among potential 2024 presidential candidates, with prominent figures like Ron DeSantis and Vivek Ramaswamy from the Republican camp expressing skepticism. Notably, even a Democratic presidential hopeful, Robert F. Kennedy Jr., has criticized CBDCs as instruments of control and oppression.

Representative Tom Emmer’s reintroduced legislation represents an updated version of a bill he introduced earlier this year. It reflects the rapidly evolving landscape of digital asset policies and is co-sponsored by 49 congressional Republicans. The bill incorporates two significant changes from its previous iteration.

Restricting “Intermediated CBDCs”

One of the key provisions in the revised legislation is the prohibition of “intermediated CBDCs.” These are CBDCs issued by the Federal Reserve but managed by retail banks and other financial institutions rather than being directly controlled by the Fed. This approach mirrors China’s model for its digital yuan.

The bill’s new version removes the Federal Reserve’s requirement to report any Central Bank digital currency pilot programs or studies to Congress. Instead, separate bills would address such matters, like Rep. Alex Mooney’s Digital Dollar Pilot Prevention Act.

Similar anti-CBDC legislation has made its way into the Senate, with proposals such as the “No CBDC Act” by Mike Lee and a bill by Ted Cruz. These Senate initiatives aim to prevent the Federal Reserve from directly issuing CBDCs to individuals.

Challenges to Passage

Despite these efforts, the chances of anti-CBDC legislation passing this year remain slim due to Democratic control over the Senate and the White House. Nevertheless, supporters of Emmer’s bill are optimistic that it will raise public awareness about the potential drawbacks associated with CBDCs.

Emmer has voiced concerns about the Biden administration’s position, arguing that it compromises the financial privacy rights of Americans in exchange for a surveillance-style CBDC. He emphasizes the importance of the legislation in curbing the power of unelected bureaucrats and ensuring that US digital currency policy aligns with values such as privacy, individual sovereignty, and free-market competitiveness.

As the bill is reintroduced, a House Financial Services subcommittee hearing on CBDCs is scheduled for later this week. This gathering promises to be a focal point for discussions on the contentious issue of CBDCs in the United States.