Senator Tom Emmer, a crypto enthusiast, proposed a bill on January 12 that seeks to restrict the Federal Reserve from issuing a Central Bank Digital Currency.
The move came unexpectedly as more countries look to leverage blockchain technology and launch digital currencies of their own. China, which has been looking to launch its CBDC since 2014, launched several pilot projects the past year to test the efficiency of its digital currency.
Today, I introduced a bill prohibiting the Fed from issuing a central bank digital currency directly to individuals. Here’s why it matters: pic.twitter.com/S7pQ5rVc6n
— Tom Emmer (@RepTomEmmer) January 12, 2022
Meanwhile, the Federal Reserve, US’ central banking institution, has long been studying the implications of CBDCs but is yet to reach a conclusion. Now, the new bill introduced by the Minnesota representative has likely added yet another hurdle ahead of FED’s CBDC initiatives.
Through this new bill, Emmer highlighted the severe impacts that may potentially stem from CBDC issuance, including the centralization of information, mass surveillance of consumers’ financial activity, and increased proneness of cyberattacks.
“Requiring users to open up an account at the Fed to access a U.S. CBDC would put the Fed on an insidious path akin to China’s digital authoritarianism,” Emmer said in the press release. He added:
“It is important to note that the Fed does not, and should not, have the authority to offer retail bank accounts. Regardless, any CBDC implemented by the Fed must be open, permissionless, and private. This means that any digital dollar must be accessible to all, transact on a blockchain that is transparent to all, and maintain the privacy elements of cash.”
Congressman Emmer is an executive member of the House Financial Services Commission and the Financial Technology Task Force. He has offered multiple crypto-favorable bills in the past, including the Securities Clarity Act, a bill that would help regulators in categorizing different cryptocurrencies as a commodity, security, or currency.
Emmer’s move came just two days after Fed Chair Jerome Powell testified at a US Senate hearing as part of his second tenure as the Federal Reserve chairman. During the hearing, Powell announced that the Fed will issue the long-awaited report on CBDC within a few weeks.