The U.S. House passed the CBDC Anti-Surveillance State Act, limiting the Federal Reserve's ability to issue digital currencies directly to individuals.
The U.S. House of Representatives has passed the CBDC Anti-Surveillance State Act (HR 5403) with a vote of 216 for and 192 against. The legislation targets the potential creation and use of a central bank digital currency (CBDC) by the Federal Reserve, aiming to prevent a scenario where the central bank could offer services or issue digital currency directly to individuals.
Bill banning the Fed from issuing a CBDC passes the House 216 to 192. pic.twitter.com/jXwbOulWyA
— TFTC (@TFTC21) May 23, 2024
The vote saw a clear partisan divide, with all Republicans present in the House supporting the bill and only three Democrats joining them. The legislation is designed to prevent the possible surveillance and monitoring capabilities that come with a CBDC akin to the one being tested by China with its digital yuan.
The bill, if it becomes law, would set a firm boundary on the Federal Reserve's activities. It explicitly prohibits the Fed from "offering products or services directly to an individual, maintaining an account on behalf of an individual, or issuing a central bank digital currency directly or indirectly to an individual." This constraint could only be lifted through congressional approval.
The legislation also aims to prevent the Fed from utilizing a digital dollar to enforce monetary policy. This step is seen as a way to ensure financial privacy and prevent government overreach into Americans' financial lives.
Chairman Patrick McHenry (NC-10) of the Financial Services Committee voiced strong support for the bill, stressing the importance of protecting Americans' financial privacy from the type of surveillance that could be enabled by a CBDC. "That type of financial surveillance has no place in the United States," McHenry stated, adding that the bill "ensures that [a CBDC] must reflect American values."
#WATCH: Chairman @PatrickMcHenry delivers remarks in support of the CBDC Anti-Surveillance State Act.
— Financial Services GOP (@FinancialCmte) May 23, 2024
"If not open, permissionless, and private, a CBDC is no more than a CCP-style surveillance tool waiting to be weaponized."
📺 👇 pic.twitter.com/m29OPs6PDh
The bill's passage in the House reflects concerns over privacy and the concentration of power within the financial system. It resonates with the global caution around how governments might use CBDCs to track and control individual spending habits.
While the House has approved the legislation, its future remains uncertain as it needs to pass through the Senate and then be signed by the President to become law.
