US lawmakers advance bill to block digital dollar issuance

The U.S. House Financial Services Committee has approved the CBDC Anti-Surveillance State Act, a bill designed to prohibit federal banks from issuing or using central bank digital currencies (CBDCs).

The legislation, introduced by Representative Tom Emmer, passed with a 27-22 vote on April 2 and now moves to the full House for a vote.

The bill aims to amend the Federal Reserve Act, preventing Federal Reserve banks from offering products or services directly to individuals or issuing CBDCs.

Supporters of the bill argue that it protects financial privacy and prevents potential government overreach.

“Any digital version of the dollar must uphold our American values of privacy, individual sovereignty, and free market competitiveness,” Emmer stressed.

Republican lawmakers have raised concerns that CBDCs could be used as surveillance tools. Senator Ted Cruz has introduced a companion bill in the Senate, reflecting coordinated efforts to restrict CBDC development.

Critics have compared potential U.S. CBDC implementations to China’s digital yuan, which tracks citizen behavior.

Democratic lawmakers have expressed concerns that banning CBDCs could hinder financial technology innovation and undermine the dollar’s global competitiveness.

The bill also tackles fears that programmable government-controlled money could facilitate transaction monitoring and restrictions.

“We’re not going to let this happen,” cited Emmer, referring to China’s social credit system as a potential misuse of such technology and emphasising the need for privacy and individual freedoms.

While the bill passed in committee, it faces challenges in securing bipartisan support in Congress. Republicans are generally in favor, but Democrats are divided over its potential effects on innovation and monetary policy.