Reserve

United

Star Wars

The CBDC Anti-Surveillance State Act passed the United States House of Representatives on a largely partisan vote on May 23. The bill, which must still face a vote in the Senate, amends the Federal Reserve Act of 1913 to prohibit Federal Reserve banks “from offering certain products or services directly to an individual, to prohibit the use of central bank digital currency for monetary policy, and for other purposes.”
The Republican-backed bill’s debate was sparsely attended. Republican supporters spoke about the potential for the abuse of a central bank digital currency (CBDC), while Democrats concentrated on innovation, the dollar’s international competitiveness and the <a href="https://www.congress.gov/118/bills/hr5403/BILLS-118hr5403rh.pdf" target="_blank" rel="noopener noreferrer nofollow">bill</a>’s poor drafting.
French Hill, the Chairman of the Financial Services Committee Subcommittee on Digital Assets, Financial Technology and Inclusion, said:
<blockquote>
 “We live in a world where the government can abuse the tools it has.”
</blockquote>
Representative Mike Flood <a href="https://cointelegraph.com/news/dems-speak-up-global-leadership-us-cbdc-republicans-fear-dark-side" rel="noopener noreferrer nofollow">reused his rhetorical device</a> urging the audience to “imagine the politician you despise the most” with control over a CBDC.
Financial Services Committee member Warren Davidson called the New York Fed’s Project Hamilton “the same creepy surveillance tool” as China’s digital yuan. He said the pilot project “could be developed to something further.” The Fed was not responding to dialog, so it must respond to law, he said.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/c8ffd81f-02c6-4a8e-af7a-75e28eb3ad76.png" alt="" title="">
 <figcaption style="text-align: center;">The CBDC Anti-Surveillance State Act. Source: congress.gov
 </figcaption>
</figure>
That idea was echoed by Rep. Alexander Mooney, author of an amendment to the bill that restricted CBDC research, who said a CBDC should not be “available at a moment’s notice.”
Related: <a href="https://cointelegraph.com/news/new-york-fed-collaborates-with-singapore-mas-to-explore-cbdcs" rel="noopener noreferrer nofollow">New York Fed collaborates with Singapore MAS to explore CBDCs</a>
Frequent references were made to the digital yuan and the blockage of bank accounts in Canada during a trucker drivers' demonstration against COVID-19 vaccination. Warren also mentioned George Orwell—author of the novel 1984—the New Testament Book of Revelations and the Deathstar—a device in the Star Wars film franchise—in his arguments. Marjorie Taylor Greene spoke about the “deep state” and the “Democrat regime.”
The exact implications of the bill were also disputed. Brad Sherman called the bill a “word salad” that favored “crypto bros.” He added that no one would be required to use a CBDC.
While Republican arguments focused on a retail CBDC, Financial Services Committee ranking member Maxine Waters claimed the bill could be construed to ban a wholesale CBDC as well. Waters argued that the bill would “risk undermining the primacy of the U.S. dollar” globally.
The bill could also be interpreted to ban Federal Reserve holdings of bank reserves, which is necessary to administer payment systems, Waters said:
<blockquote>
 “[The bill] blocks the American economy as it operates today and has for decades."
</blockquote>
Waters also mentioned zero-knowledge proof technology that could guarantee user privacy. Dollar-pegged stablecoins could lose their value in a run, while a CBDC could not, she added.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/da5ea3e0-85c0-4597-b4da-d5f57e1cd622.png" alt="" title="">
 <figcaption style="text-align: center;">Source: XRP Drops
 </figcaption>
</figure>
Financial Services Committee member Jake Auchincloss said that his proposed <a href="https://www.congress.gov/118/bills/hr3402/BILLS-118hr3402ih.pdf" target="_blank" rel="noopener noreferrer nofollow">bill</a>, "Power of the Mint Act,” would accomplish similar goals without the drawbacks of the bill under consideration, but it had been blocked by Republicans.
The CBDC Anti-Surveillance State Act was <a href="https://cointelegraph.com/news/us-lawmaker-introduces-bill-aimed-at-limiting-fed-s-authority-on-digital-dollar" rel="noopener noreferrer nofollow">introduced into the House</a> by Rep. Tom Emmer in February 2023. It passed by a vote of 216-192.
Magazine: <a href="https://cointelegraph.com/magazine/digital-yuan-adoption-payments-regulation/" rel="noopener noreferrer nofollow">How the digital yuan could change the world… for better or worse</a>

CBDC Anti-Surveillance State Act passes US House in partisan vote

Cointelegraph

Other articles published on May 23, 2024

Sui and Mesh Combine Forces to Bring Simplified Transactions Across the Sui Ecosystem

Nexo Crypto Exchange Infuriates Users With Sudden Hike In Bank Processing Fees

Crypto Whale Worth $90,000,000 Accumulates Retik Finance (RETIK) Heavily as Token Price Reacts Po...

Pepe Price Soars 35% In A Week As Experts Say This Chain-Travelling Dogecoin Derivative Might Be ...

Staking Sacrificed: BlackRock, Grayscale, Bitwise Amend Spot Ethereum ETF Proposals

VersiFi Acquires Ather to Advance Global Trading Operations

Join our free newsletter for daily crypto updates!