House Votes on CBDC Ban

The House of Representatives has made a significant move, passing the CBDC Anti-Surveillance State Act** with a vote of 216-192. This bill effectively prohibits the Federal Reserve from issuing a central bank digital currency (CBDC).

House Majority Whip Tom Emmer (R-MN) championed the legislation, which aims to prevent government overreach and safeguard financial privacy.

Legislative Details

The bill restricts the Fed from directly and indirectly distributing CBDC to individuals. It cites concerns over the potential for personal financial data collection.

Moreover, the legislation bars the central bank from leveraging a CBDC to conduct monetary policy. Emmer has vocally criticized the potential for a CBDC to mirror surveillance tools used by authoritarian regimes, mentioning China's digital renminbi as an example.

"This bill is crucial for maintaining privacy, individual sovereignty, and the competitive free market," said Emmer.

Votes and Debate

The vote count revealed a stark division in the House. Overall, 213 Republicans and three Democrats voted for the bill, while 192 Democrats voted against it.

This division underscores the contentious nature of the legislation. During the debate, Democrats argued that the concerns were overblown and that a ban would block public sector innovation and research.

Previous Legislation

Thursday's vote count is far from the previous day's vote. On Wednesday, 71 Democrats joined 208 Republicans in voting for the Financial Innovation and Technology for the 21st Century Act.

This crypto market structure bill would give the U.S. Commodity Futures Trading Commission greater spot market authority over digital assets. It also describes how the Securities and Exchange Commission can approach the sector. This bill aims to protect citizens from potential financial surveillance by the Federal Reserve.

Public and Political Reactions

While some Democrats argue that the legislation could stifle the U.S.'s competitive edge in digital currency innovation, conservative groups like Heritage Action advocate for the bill as a defense against government intrusion into personal finances.

The Federal Reserve has previously explored the concept of a CBDC, including a trial with significant banks and a public comment period to gauge interest and concerns. This latest legislative move could significantly impact ongoing and future Fed initiatives in the digital currency space.