The CBDC Anti-Surveillance State Act was approved by the United States House of Representatives on May 23, following a largely partisan vote. This bill, which still needs to be voted on in the Senate, seeks to amend the Federal Reserve Act of 1913 to prevent Federal Reserve banks from offering certain products or services directly to individuals, prohibit the use of central bank digital currency (CBDC) for monetary policy, and serve other purposes.
During the debate on the bill, Republican supporters expressed concerns about the potential for abuse of a CBDC, while Democrats focused on innovation, the international competitiveness of the dollar, and the poor drafting of the bill. French Hill, the Chairman of the Financial Services Committee Subcommittee on Digital Assets, Financial Technology, and Inclusion, stated that Representative Mike Flood used a rhetorical device urging the audience to imagine the politician they despise the most having control over a CBDC.
Warren Davidson, a member of the Financial Services Committee, compared Project Hamilton to China’s digital yuan, referring to it as “the same creepy surveillance tool.” He warned that the pilot project could be further developed into something more invasive. Davidson argued that since the Federal Reserve was not responding to dialogue, it must be compelled to respond to the law.
Representative Alexander Mooney, who authored an amendment to restrict CBDC research, emphasized that a CBDC should not be readily available. Numerous references were made to the digital yuan and the blocking of bank accounts during a trucker drivers’ demonstration against COVID-19 vaccination in Canada. Davidson also mentioned George Orwell, the author of the novel 1984, the Book of Revelations in the New Testament, and the Deathstar from the Star Wars film franchise in his arguments. Marjorie Taylor Greene spoke about the “deep state” and the “Democrat regime.”
The exact implications of the bill were a subject of dispute. Brad Sherman criticized the bill as a “word salad” that favored “crypto bros.” He clarified that no one would be obligated to use a CBDC.
While Republican arguments centered around a retail CBDC, Maxine Waters, the ranking member of the Financial Services Committee, argued that the bill could be interpreted to ban a wholesale CBDC as well. She warned that this would risk undermining the global primacy of the U.S. dollar.
Waters also mentioned zero-knowledge proof technology as a means to guarantee user privacy. She added that dollar-pegged stablecoins could lose their value in a run, whereas a CBDC would not.
Jake Auchincloss, a member of the Financial Services Committee, stated that his proposed bill, the “Power of the Mint Act,” aimed to achieve similar goals without the drawbacks of the bill currently under consideration. However, it had been blocked by Republicans.
The CBDC Anti-Surveillance State Act was introduced into the House by Representative Tom Emmer in February 2023 and passed with a vote of 216-192.
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