On February 22, Republican Congressman Tom Emmer of the US House of Representatives introduced a bill to prohibit the Federal Reserve (Fed) from issuing a central bank digital currency (CBDC).
The “State Anti-CBDC Surveillance Law” aims to protect the financial privacy of US citizens by prohibiting the creation of a CBDC by the Fed without prior congressional review and approval.
Emmer argued that the creation of a CBDC could have a negative impact on financial privacy and individual freedom, as authorities and regulators could use it as a tool to track and control citizen spending.
Today, I introduced the State Law Against CBDC Surveillance to stop the efforts of unelected bureaucrats in Washington, DC to strip Americans of their right to financial privacy. 👇 pic.twitter.com/lONbHFZMk7
— Tom Emmer (@GOPMajorityWhip) February 22, 2023
Emmer further explained that the bill prohibits the Fed from issuing a CBDC directly to anyone, prevents it from using a CBDC to implement monetary policy and control the economy, and sets the framework for greater transparency in such projects.
The congressman clarified that he is not opposed to the technological innovation that could come with the creation of a CBDC. However, he maintained that these innovations should not violate the rights of citizens.
Financial privacy is a priority
The creation of a CBDC could have a significant impact on financial privacy. Since CBDC transactions would be recorded on a blockchain, authorities would be able to track and trace financial transactions in real time. This has raised concerns about data privacy and surveillance and the possibility of government intrusion into financial affairs.
However, advocates argue that CBDCs could bring many benefits, including greater financial inclusion, reduced transaction costs, and faster settlement times. Furthermore, CBDCs could provide an alternative to traditional banking services for people who do not have access to them.
For several years now, Emmer has been an advocate for blockchain technology and cryptocurrencies, calling for regulation that encourages innovation and growth in the sector without harming people. Emmer is known for his efforts to drive cryptocurrency adoption and promote growth in the industry.
He has been in favor of receiving part of his payment in cryptocurrency and has also raised concerns about the way the government handled the arrest of Sam Bankman-Fried. Coinbase has his name on the list of politicians who are “very supportive” of cryptography.
China’s dominance in CBDC development
China has been at the forefront of CBDC development, launching a pilot program for its digital currency in 2020. While other countries have been exploring the possibility of issuing such a product, China has taken the lead, conducting cross-border trials with countries such as the United Arab Emirates, Hong Kong and Thailand, among others.
China’s digital yuan has been in development since 2014 and is already in use in 23 regions of the country, facilitating the transfer of more than 100 billion yuan (approximately $15.5 billion). If accepted globally, it could become a major competitor to the US dollar, giving China a greater presence on the world economic stage.
While the US has been looking into launching its own CBDC, China’s dominance in the world of digital currencies continues to grow, with the potential to reshape the global financial landscape.
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