The U.S. House of Representatives passed H.R. 5403, the CBDC Anti-Surveillance State Act, sponsored by Majority Whip Tom Emmer (MN-06).
The legislation blocks the creation and issuance of a central bank digital currency (CBDC) without explicit approval from Congress, with the aim of protecting Americans’ financial privacy.
The bill aims to prevent unelected officials from developing a CBDC that could infringe on Americans’ financial privacy. It specifically prohibits the Federal Reserve from offering certain products or services directly to individuals and limits the use of CBDCs for monetary policy.
Key provisions include prohibiting Federal Reserve banks from offering products or services directly to individuals, holding accounts on behalf of individuals, and issuing any form of CBDC without congressional approval.
It also limits the use of CBDCs to implement monetary policy and ensures that such measures maintain the privacy protections of physical currencies.
The move follows concerns that a CBDC could be used to monitor and control financial transactions, similar to systems that exist in other countries.
House Financial Services Committee Chairman Patrick McHenry supported the bill and highlighted concerns about financial oversight. He cited examples from other countries, such as China’s use of a CBDC to monitor and control citizens’ spending habits.
McHenry said:
“There is no place for this type of financial supervision in the United States.”
He emphasized the importance of the bill in response to the Biden administration’s push for CBDC research and development, which he said could threaten financial privacy.
McHenry recognized Emmer and other co-sponsors, including French Hill and Alex Mooney, for their efforts to advance the legislation.
H.R. 5403 received broad support, reflecting widespread concerns about the potential misuse of digital currencies by government agencies. The passage of the bill marks a crucial step in protecting financial privacy in the digital age.
Emmer emphasized that the bill is intended to prevent the federal government from following in the footsteps of authoritarian regimes that use digital currencies for surveillance.
The bill now goes to the Senate for consideration. If passed, it will significantly limit the Federal Reserve’s ability to implement a CBDC without legislative oversight, strengthening Congress’s role in major financial decisions.