A historic moment is unfolding in the US Congress. Yesterday, the House of Representatives passed a bill that prohibits the Federal Reserve from issuing a Central Bank Digital Currency (CBDC).
The bill, backed by 213 Republicans and 3 Democrats, ensures that the US Congress maintains control over digital currency policy. According to Tom Emmer, the author of the bill, "My legislation guarantees that American policy on digital currencies remains in the hands of the American people, so that any development of digital money reflects our values such as privacy, individual sovereignty, and competitiveness on the free market."
Emmer's words reflect his concerns about CBDCs not being equivalent to Bitcoin. He fears that a CBDC could be designed to allow the central bank to track consumer transactions, raising concerns about privacy. This is precisely what Emmer is worried about – protecting Americans' privacy.
Congressman French Hill, who supported the bill, cited the dangers of too much government power and referred to the Canadian example. In 2022, Prime Minister Justin Trudeau froze the bank accounts of citizens who protested against lockdowns. Hill argued that the US does not need a CBDC, citing the existing payment system that can benefit from the private sector.
Democrats like Maxine Waters, on the other hand, argue that the Fed could design a CBDC that does not infringe on Americans' privacy.
"This bill is an attempt to stifle innovation and competitiveness in the United States abroad and weaken a federal agency that is critical in fighting inflation," Waters added.
Cryptocurrency Regulations
Interestingly, on Wednesday, the House also passed another bill related to digital currencies. This bill gives the Securities and Exchange Commission (SEC) authority over the cryptocurrency sector. The bill still needs to be passed by the Senate and signed by the President before it becomes law.
The US government's stance on digital currencies is a crucial issue for both regulators and private investors. As CBDCs and cryptocurrencies continue to evolve, it is essential for policymakers to strike a balance between innovation and protection of citizens' privacy.
