March 28, 2024
House Financial Services Committee Approves CBDC Anti-Surveillance State Act
Policy & Regulation

House Financial Services Committee Approves CBDC Anti-Surveillance State Act

The CBDC Anti-Surveillance State Act was approved by the House Financial Services Committee (HFSC) on Wednesday, making it ready for a future vote on the House floor.

Congressman Tom Emmer (R-MN), a proponent of cryptocurrencies, has introduced legislation that would prevent the Federal Reserve from issuing Central Bank Digital Currency (CBDC) to private individuals. CBDCs have been described by Emmer as “financial surveillance tools.” Ron DeSantis, the governor of Florida, and Robert F. Kennedy Jr. are two presidential contenders who have opposed CBDCs for comparable reasons.

In prepared remarks on Wednesday, Emmer added, “This is not just alarming—it’s downright un-American.” Other instances of “governments weaponizing their financial system against their citizens,” according to the congressman, include the Chinese Communist Party’s use of CBDCs to monitor consumer spending and Justin Trudeau, the Canadian prime minister, freezing protesters’ bank accounts last year.

The measure forbids the use of such a tool to carry out monetary policy, which the European Central Bank has stated may be “by no means straightforward” and could be “weakened or strengthened” by CBDCs in many ways. Private market stablecoins like Circle’s USD Coin (USDC) and Tether’s USDT are unaffected by the legislation.

Like a lot of other crypto-related problems, the bill’s support was divided along partisan lines. Despite having 60 Republican co-sponsors, no Democratic member of the Committee voted for moving the bill forward, and 20 voted against it.

Representative Brad Sherman (D-CA), who spoke against the bill, referred to its supporters as “hypocritical” for favouring privately held cryptocurrencies over those that were issued by central banks. If this bill included banned bitcoin, he remarked, “I’d be willing to support it.”

Rep. Maxine Waters (D-CA), a Democrat, blasted Republicans for being “deeply anti-innovation” when it comes to the technology that competitors like China are embracing. She claimed that if a CBDC is not put into place, “the dollar loses its status as the world’s reserve currency” and “American citizens miss out on faster, cheaper, and simpler payments.”

Prior stablecoin legislation that was opposed by the majority of Democrats despite months of negotiations was blocked, according to Patrick McHenry, chair of the House Financial Services Committee (R-NC), who has previously accused Waters and her colleagues of being influenced by the White House. Democrats viewed the Clarity for Payment Stablecoins Act of 2023, which would have created a legislative framework for private stablecoins, as being overly supportive of the cryptocurrency industry.

Image: Unsplash

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