On February 22, Republican Congressman Tom Emmer of the United States 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 US citizens by prohibiting the creation of a CBDC by the Fed without prior review and approval by Congress.
Emmer argued that the creation of a CBDC could have a negative impact on 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 stop unelected bureaucrats in Washington, DC from depriving 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, bars it from using a CBDC to implement monetary policy and control the economy, and sets the framework for more transparency on such projects.
The congressman clarified that he was not opposed to the technological innovation that could accompany the creation of a CBDC. However, he maintained that these innovations should not infringe upon the rights of citizens.
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, lower transaction costs, and faster settlement times. In addition, CBDCs could offer an alternative to traditional banking services for people who do not have access to them.
For several years, Emmer has been an advocate for blockchain technology and cryptocurrencies, calling for regulation that encourages innovation and growth in the sector without harming people. Emmer is known for his efforts to drive crypto adoption and promote industry growth.
He spoke out in favor of receiving part of his payment in crypto and also expressed concerns about how the government handled the arrest of Sam Bankman-Fried. Coinbase has its name on the list of politicians who are “Very encouraging” of crypto.
The dominance of China in the development of CBDCs
China has been at the forefront of developing CBDCs, launching a pilot program for its digital currency in 2020. As other countries have explored the possibility of issuing such a product, China has taken the lead in conducting cross-border testing 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 used in 23 regions across the country, facilitating the transfer of more than 100 billion yuan (about $15.5 billion). If it becomes globally accepted, it could become a significant competitor to the US dollar, giving China a bigger presence in the global economic scenario.
As the United States explores 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.
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