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A Republican lawmaker has reintroduced a bill that aims to prevent the Federal Reserve from issuing a central bank digital currency (CBDC) without Congressional authorisation.
Last week, Representative Tom Emmer (R-MN) reintroduced the CBDC Anti-Surveillance Act, in a bid to prevent the central bank from undermining the financial privacy of US citizens.
“The bill is simple,” said Emmer. “It halts the effort of unelected bureaucrats from ever issuing a CBDC that could upend the American way of life.
“CBDC’s introduce significant privacy risks and are fundamentally the antithesis of American values.”
The bill would amend the Federal Reserve Act to prohibit the Federal Reserve banks from issuing a CBDC, whether directly or through commercial banks or other intermediaries.
The Federal Reserve Act would also be amended to prohibit the central bank from testing, studying, developing, creating or implementing a CBDC.
“It is the sense of Congress that the Board of Governors of the Federal Reserve currently does not have the authority to issue a CBDC, and will not have such authority unless Congress grants it,” the bill notes.
The bill defines CBDC as a form of digital money or monetary value that is: i) denominated in US dollars; ii) a direct liability of the Federal Reserve System; and iii) widely available to the general public.
It also makes a specific exception for dollar-denominated digital currencies that are “open” and “permissionless” — i.e. stablecoins that run on public blockchains or other distributed ledger technology (DLT).
In February, as covered by Vixio, President Trump issued an executive order that bans all US agencies from issuing CBDC and terminates any existing plans to study or develop the technology.
Speaking before the House Financial Services Committee, Emmer recognised that much of his bill has already been achieved by Trump’s executive order.
However, he said the bill is necessary in order to ensure that Trump’s CBDC ban is permanent.
“CBDC technology is inherently un-American, and I’m grateful to President Trump for understanding this and signing an executive order banning CBDCs,” he said.
“My bill would codify the executive order into law and prevent a future administration from creating such an obvious tool for financial surveillance against its own citizens.”
Emmer invited Charles Cascarilla, co-founder and CEO of stablecoin issuer Paxos, to endorse his bill before the committee.
“Mr. Cascarilla, proponents of a US CBDC often cite global competition and the race to extend the dollar’s status as the world’s reserve currency as promises of a CBDC,” he said.
“Do you think there’s anything a potential US CBDC could accomplish that a privately-issued stablecoin cannot?”
“I don’t think so,” said Cascarilla. “I think that, historically, innovation in the US in both technology and the financial services landscape has come from the private sector, and I think that is what we should continue to embrace.”
Representative Maxine Waters (D-CA), ranking member of the House Financial Services Committee, led the Democrats in opposing the bill.
“The Republican resistance to even allow the Fed to study CBDCs is not only anti-innovation but it is anti-American,” she said.
“It helps China win the digital currency space race, and undermines the US dollar as the world's reserve of currency.”
In addition to Cascarilla, Emmer said the bill already has the support of more than 100 members of Congress and a wide range of industry associations.
These include the American Bankers Association (ABA), the Independent Community Bankers Association, the Blockchain Association and the Club for Growth.
Second time lucky
In 2023, Emmer filed an almost identical bill of the same name, which was passed by the House of Representatives in 2024.
The bill was passed in a 216-192 vote, without a single dissenting vote from a Republican lawmaker.
All but three Democrats who voted on the bill voted against it, highlighting the partisan nature of the US CBDC debate.
Following the vote, the bill was received in the Senate, where it was read twice by the Senate Banking Committee, before fading away in the run-up to the presidential election.
Last year, the ABA said it “applauds” Emmer’s leadership in pushing US lawmakers to prohibit CBDC.
“The risks of a US CBDC — which would disintermediate banking and limit banks’ ability to lend and support economic growth — far outweigh any theoretical benefits,” said Rob Nichols, president and CEO of the ABA.
“We urge all members of the House to support this important legislation to prevent a CBDC, which would only undermine the financial system and the US economy.”
