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<p>In a recent House floor session, Congresswoman Maxine Waters passionately opposed H.R. 5403, the “CBDC Anti-Surveillance State Act.” This proposed legislation aims to prohibit the issuance of a central bank digital currency (CBDC) and restrict the Federal Reserve from maintaining bank reserves crucial for operating payment systems and combatting inflation. Waters warned that this bill not only hampers U.S. financial innovation but also endangers the country’s economic supremacy on the global stage.</p>
<h2 class="wp-block-heading" id="h-the-critical-role-of-cbdcs">The Critical Role of CBDCs</h2>
<p>CBDCs, or central bank digital currencies, represent digital assets issued by a nation’s central bank—in the U.S., this is the Federal Reserve. Waters emphasized the significant advantages of CBDCs over other digital assets, noting their potential to maintain stable value, earn public trust, and serve as reliable means of payment.</p>
<p>Two types of CBDCs exist: <strong>retail CBDCs</strong> for everyday consumer transactions, like buying a cup of coffee, and <strong>wholesale CBDCs</strong>, used exclusively for transactions among financial institutions and the Fed. Currently, 134 countries, accounting for 98% of global GDP, are exploring or implementing CBDCs. Waters compared the development of CBDCs to the space race, underscoring the urgency for the U.S. to catch up, particularly as China has already deployed its own CBDC to millions of users.</p>
<h2 class="wp-block-heading" id="h-global-implications-of-falling-behind">Global Implications of Falling Behind</h2>
<p>China’s rapid progress with its CBDC, which includes integrated government surveillance, contrasts sharply with the potential for a U.S. CBDC designed to uphold consumer privacy and American values. Waters cautioned that H.R. 5403’s ban on CBDCs would position the U.S. as the first and only country to prohibit such a currency, potentially diminishing the global dominance of the U.S. dollar.</p>
<p>The dollar’s preeminence in international trade and foreign exchange transactions offers substantial benefits, including lower borrowing costs and enhanced economic leverage in foreign policy. By stalling on CBDC development, the U.S. risks losing these advantages as other digital currencies, such as the Digital Euro, could become preferred for international trade.</p>
<h2 class="wp-block-heading" id="h-the-broader-economic-impact">The Broader Economic Impact</h2>
<p>The nonpartisan Congressional Budget Office (CBO) has highlighted that H.R. 5403’s prohibition could extend to the Federal Reserve’s bank reserves. These reserves are vital for the Fed’s core functions, including conducting monetary policy to prevent recessions and managing inflation. Moreover, disrupting the Fed’s ability to use payment systems like Fedwire could destabilize the banking system by slowing down interbank transactions.</p>
<p>Waters also pointed out the deliberate nature of this legislative oversight. Despite repeated warnings from Democrats about the bill’s broad and potentially harmful language, Republicans have not amended it. This rigidity aligns with broader efforts by some political factions to undermine the Federal Reserve’s independence, an agenda that Waters connects to Donald Trump’s threats to fire the Fed chair and proposals from the MAGA transition playbook to abolish the Fed.</p>
<h2 class="wp-block-heading" id="h-protecting-privacy-and-promoting-innovation">Protecting Privacy and Promoting Innovation</h2>
<p>Addressing privacy concerns, Waters argued that the bill’s purported focus on protecting consumer privacy is misleading. The current financial system already faces numerous data privacy issues that this bill fails to address. Furthermore, privacy within a CBDC framework is a design choice, meaning a U.S. CBDC could be developed to ensure robust privacy protections.</p>
<p><strong>In conclusion,</strong> Congresswoman Waters urged her colleagues to reject H.R. 5403. She argued that the bill is not about safeguarding privacy but rather about hindering U.S. innovation and economic competitiveness. By opposing this legislation, Waters advocates for a future where the U.S. remains at the forefront of financial technology and maintains its economic leadership globally. The vote on this bill, she insists, is crucial for the country’s economic security and technological advancement.</p>
<p>The post <a href="https://www.unlock-bc.com/123569/maxine-waters-opposes-cbdc-ban/" rel="noopener noreferrer nofollow">Congresswoman Maxine Waters Opposes CBDC Anti-Surveillance State Act</a> appeared first on <a href="https://www.unlock-bc.com" rel="noopener noreferrer nofollow">UNLOCK Blockchain</a>.</p>

Congresswoman Maxine Waters Opposes CBDC Anti-Surveillance State Act

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