Bill banning Fed-controlled crypto a good first step, but Congress must do more for monetary freedom

On Wednesday, the US House Financial Services Committee is expected to vote on House Majority Whip Tom Emmer’s ‘‘CBDC Anti-Surveillance State Act,” aiming to prevent the Federal Reserve from issuing or coordinating a central bank digital currency, or CBDC. The expected vote in the House committee to stop the Fed from directly or indirectly issuing a CBDC comes as there is increasing opposition and skepticism of such a scheme from the general public, in the US and around the world.

Less than 20 percent of Americans support a CBDC in a recent poll. Opposition rises even further when Americans are informed that CBDCs could be used by government officials for nefarious tasks, such as monitoring personal spending and controlling the ways people spend their money.

The legislation being voted on Wednesday has been commendably strengthened after its chief sponsor, Rep. Emmer (R-MN), listened to concerns of CEI and others about loopholes the Fed could use to create a backdoor CBDC. The bill now prohibits explicitly both the direct issuance of a CBDC by the Fed and the issuance of it indirectly through Fed coordination with “a financial institution or other intermediary” such as a contractor.

Congress needs to do much more to stop CBDCs and safeguard monetary freedom. It also needs to pass legislation preventing the Fed from committing to any “pilot” or other programs involving the development of a CBDC.

The Digital Dollar Prevention Act, sponsored by Rep. Alex Mooney (R-WV), contains such prohibitions. It needs to stop the SEC’s “regulation by enforcement” that deems privately issued cryptocurrencies “securities,” even though they are vastly different from stocks and bonds. And it needs to reject legislation such as the so-called Credit Card Competition Act that would compromise the private sector payment system through higher consumer costs for credit cards and weakened data security.

But the legislation expected to be voted on is a good first step and a strong signal of rejection of CBDCs for the US and the world.

For more information:

“How Durbin & Co. Credit And Debit Card Controls Could Pave The Way For CBDCs,” Forbes,https://www.forbes.com/sites/johnberlau/2023/09/13/how-durbin–co-credit-and-debit-card-controls-could-pave-the-way-for-cbdcs/?sh=2dba13593318

“The Global Rejection of CBDCs,” RealClearMarkets, https://www.realclearmarkets.com/articles/2023/08/03/the_global_rejection_of_cbdcs_970113.html

“Biden executive order on crypto may kill financial innovation,” USA Today, https://www.usatoday.com/story/opinion/columnist/2022/03/11/biden-crypto-kill-financial-innovation/6984432001/