The House Financial Services Committee (HFSC) passed the CBDC Anti-Surveillance State Act on Wednesday, readying the legislation for a future vote on the House floor.
Proposed by crypto-supportive Congressman Tom Emmer (R-MN), the legislation aims to bar the Federal Reserve from issuing a Central Bank Digital Currency (CBDC) to individuals. Emmer has referred to CBDCs as “financial surveillance tools.” Numerous Presidential candidates including Florida Governor Ron DeSantis and Robert F. Kennedy Jr. have expressed opposition to CBDCs for similar reasons.
“This is not just alarming—it’s downright un-American,” said Emmer during prepared remarks on Wednesday. The congressman cited other examples of “governments weaponizing their financial system against their citizens,” including the Chinese Communist Party’s use of CBDCs to track citizens’ purchases, and Canadian Prime Minister Justin Trudeau’s freeze on protestors’ bank accounts last year.
The bill also prevents the use of such a tool in conducting monetary policy, which the European Central Bank has suggested could be both weakened and strengthened by CBDCs in different ways, suggesting that it is “by no means straightforward.” The bill does not affect private market stablecoins, such as Circle’s USD Coin (USDC) and Tether’s USDT.
As with many crypto-related issues, support for the bill fell down partisan lines. Despite bearing 60 Republican co-sponsors, not one Democrat on the Committee voted in favor of advancing the legislation, with 20 voting against.
In a speech opposing the bill, Representative Brad Sherman (D-CA) called its proponents “hypocritical” for promoting privately controlled cryptocurrencies over central bank-issued ones. “I’d be willing to support this bill if it also ended crypto,” he said.
Democrat Rep. Maxine Waters (D-CA) also criticized Republicans for taking a “deeply anti-innovation” stance on technology that rivals, including China, are embracing. Failing to implement a CBDC, she argued, could mean “the dollar loses its status as the world‘s reserve currency,” and that “U.S. citizens lose out on faster, cheaper, and simpler payments.”
House Financial Services Committee Chair Patrick McHenry (R-NC) has previously accused Waters and her colleagues of being influenced by the White House in blocking prior stablecoin legislation, which most Democrats opposed despite months of negotiations on the bill. The Clarity for Payment Stablecoins Act of 2023 would have provided a regulatory framework for private stablecoins, which Democrats largely viewed as much too favorable to the crypto industry.