US lawmaker seeks CBDC ban amid privacy concerns

Minnesota Representative Tom Emmer has reintroduced the CBDC Anti-Surveillance State Act, aiming to prevent the Federal Reserve from issuing a central bank digital currency (CBDC) due to concerns over financial privacy and potential government surveillance.

The bill, initially proposed in 2022, seeks to amend the Federal Reserve Act to prohibit federal banks from issuing a digital dollar or similar digital assets, citing fears that such a system could be used to monitor spending habits and restrict transactions based on political considerations.

Rep. Emmer emphasised the need to codify President Trump's executive order banning CBDCs into law, ensuring that future administrations cannot reverse this decision and misuse the technology against Americans.

The bill has garnered support from approximately 100 Republicans, reflecting growing conservative opposition to CBDCs.

Critics argue that a CBDC could allow federal agencies to monitor spending habits, freeze assets, or restrict transactions based on political or social considerations.

"If not designed to be open, permissionless, and private — resembling cash — a government-issued CBDC is nothing more than an Orwellian surveillance tool that would be used to erode the American way of life," Rep. Emmer noted.

While the US has cooled on CBDC plans, other countries like Israel and the European Union are moving forward with their own digital currencies, highlighting the global divide on the issue.

The reintroduction of this bill underscores ongoing debates about privacy and financial regulation in the digital age.

"President Trump understands the dangers CBDCs present and has already issued an executive order prohibiting federal agencies from exploring one. Now, we must codify this executive order in law and permanently ban their development so a future administration cannot weaponise this technology against Americans," Rep. Emmer stated.

The bill's path forward remains uncertain, given the political divide and the Biden administration's lack of support for an outright ban.

However, its reintroduction signals that CBDC opposition will remain a key issue for Republicans in the upcoming election cycle.