While some countries are hurtling towards issuing a Central Bank Digital Currency (CBDC) it does not appear the US will do the same. Fears of excessive government control and the lure of snooping by the Feds means privacy concerns are trumping any movement for the Federal Reserve to issue a digital dollar available to consumers and businesses.
Today, Representatives Tom Emmer and Bryan Steil introduced legislation entitled the Anti-CBDC Surveillance State Act. The bill seeks to ban bureaucrats from issuing CBDCs to individuals.
A slew of groups, including old-line financial services and newer Fintech/Blockchain groups, lauded the bill’s introduction.
Kristin Smith, Chief Executive Officer of the Blockchain Association, said a digital dollar issued by the Feds is a major privacy concern for Americans as it would allow the government to monitor all purchases and expenditures.
“The right to financial privacy is protected by the Constitution. We support the Anti-CBDC Surveillance State Act – legislation aimed at preventing a CBDC from being issued in the United States. Blockchain Association thanks Majority Whip Emmer for his continued leadership on this critical issue.”
Karen Kerrigan, President & CEO of the Small Business & Entrepreneurship Council, explained that entrepreneurial strength and small business success are tied privacy, access, and innovation. She welcomed the bill’s language that stops access to American’s financial data.
“By prohibiting both direct and indirect issuance of a central bank digital currency, this legislation protects the financial privacy of entrepreneurs and small businesses while also providing safeguards against government overreach. A government-issued CBDC could expose entrepreneurs to political shenanigans and intimidation, potentially choking off their ability to conduct business. Moreover, the legislation ensures that digital innovation remains driven by the free market and private sector, where it thrives. We urge Congress to stand with entrepreneurs and all consumers by passing this crucial bill.”
CBDCs crowd out private cryptocurrencies, and pose an existential threat to consumer privacy protections, said Grover Norquist, President of Americans for Tax Reform.
“Some academics have also posited that CBDCs could be weaponized to collect taxes and enable the IRS to harass small businesses and individuals. CBDCs have no place in American society.”
This bill is endorsed by:
- America First Policy Institute,
- American Bankers Association,
- Americans for Tax Reform,
- America’s Credit Unions,
- Bank Policy Institute,
- Blockchain Association,
- Center for a Free Economy,
- Center for Freedom and Prosperity,
- Club for Growth,
- Consumer Bankers Association,
- Heritage Action,
- Independent Community Bankers of America,
- Project for Privacy & Surveillance Accountability,
- Restore the Fourth,
- Small Business & Entrepreneurship Council,
- Digital Chamber,
- Association of Mature American Citizens,
- Crypto Council for Innovation
The alternative to a CBDC is regulated stablecoins with strict privacy rules and robust reserve requirements. Several bills addressing stablecoins are already in the works.