Republican Tom Emmer, a member of the US House of Representatives, introduced a bill that would prohibit the Federal Reserve (Fed), from issuing central bank digital currencies (CBDC) on February 22.
The “CBDC Anti-Surveillance State Act” is designed to protect financial privacy by prohibiting the Fed from creating a CBDC without Congress’ approval.
Emmer claimed that the creation of a CBDC could adversely impact financial privacy, individual freedom, and that authorities and regulatory agencies could use it to control and track citizens’ spending.
Today, I introduced CBDC Anti-Surveillance State Act. This Act aims to stop Washington bureaucrats from denying Americans their right to financial privacy. pic.twitter.com/lONbHFZMk7
— Tom Emmer (@GOPMajorityWhip). February 22, 2023
Emmer explained further that the bill prevents the Fed to issue a CBDC directly, prohibits it from using CBDCs to implement monetary policies and control the economy and creates the framework for greater transparency regarding such projects.
He clarified that he was not against technological innovation, such as the creation of a CBDC. He maintained, however, that citizens’ rights should not be violated by these innovations.
Financial Privacy Is a Priority
A CBDC could have a major impact on financial privacy. Authorities could track and trace financial transactions at any time, as CBDC transactions will be stored on a blockchain. There are concerns about data privacy, surveillance and government intrusion in financial affairs.
Proponents of CBDCs claim that they could offer many benefits including increased financial inclusion, lower transaction costs and quicker settlement times. CBDCs may also be an alternative to traditional banking services, for those who don’t have them.
Emmer has been a champion of cryptocurrency and blockchain technology for many years. He calls for regulation that promotes innovation and growth without affecting people. Emmer is well-known for his efforts to promote crypto adoption and the growth of the sector.
He supports receiving part of his payment as crypto, and has expressed concern about how the government handled Sam Bankman-Fried’s arrest. Coinbase lists his name among the “Republicans Who Are Not Coinbase”Very supportive“of crypto.
China’s dominance in CBDC Development
China is a leader in CBDC development and launched a pilot program for its digital currency, the Chinese yuan, in 2020. While many countries were exploring the possibility of issuing such a product in the past, China is the leader and has conducted cross-border testing with countries like the United Arab Emirates (UAE), Hong Kong, Thailand, and others.
China’s digital currency, the yuan, has been under development since 2014. It is being used in 23 countries. This allows for the transfer of more than 100 billion yuan (approximately $15.5 million). It could be a major competitor to the US Dollar, giving China a stronger presence in the global economy if it is accepted globally.
The US is currently studying the possibility to launch its own CBDC. However, China’s dominance of the digital currency market continues to grow and has the potential to change the financial landscape.