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Journalist
Hassan Shittu
Journalist
Hassan Shittu
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In a significant move against the development of a U.S. central bank digital currency (CBDC), the House Financial Services Committee has passed H.R. 1919, known as the Anti-CBDC Surveillance State Act.
House Majority Whip Tom Emmer (R-MN) proposed the bill, which aims to prevent the Federal Reserve from issuing a CBDC directly to individuals. The committee voted 27-22 in favor of the legislation.
Emmer, a vocal critic of CBDCs, has consistently warned that such a digital currency could be used as a tool for government surveillance.
His bill aligns with broader Republican efforts to curb what they perceive as an expansion of federal control over personal finances.
The vote follows a long-running debate in Congress over digital asset regulation, with the discussion largely split between those who favor stablecoin legislation and those who fear CBDCs could erode financial freedoms.
Congressional Debate on CBDCs and Stablecoins
The passage of the Anti-CBDC Surveillance State Act is the culmination of months of debate over the role of digital currencies in the U.S. financial system.
During a March 11 House Financial Services Committee hearing titled “Navigating the Digital Payments Ecosystem: Examining a Federal Framework for Payment Stablecoins and Consequences of a U.S. CBDC,” Emmer sharply criticized the concept of CBDCs.
He argued that a government-controlled digital currency poses a direct threat to individual privacy and financial autonomy, stating,
“CBDCs introduce significant privacy risks and are fundamentally the antithesis of American values.”
At the heart of the discussion was the contrast between CBDCs and stablecoins.
The committee also debated the STABLE Act, legislation introduced by Representative Bryan Steil (R-WI) and committee chairman French Hill (R-AR).
The act seeks to regulate stablecoins while preserving financial privacy and free market competitiveness.
Emmer positioned the STABLE Act as a pro-innovation alternative, saying,
“This stablecoin bill can bring traditional finance on-chain at a global scale while preserving privacy, individual sovereignty, and free market competitiveness.”
The renewed push against CBDCs follows Emmer’s reintroduction of the Anti-CBDC Surveillance State Act on March 6.
In a press release, he reiterated concerns that a government-issued digital currency, if not designed to be open, permissionless, and private, would become a surveillance tool.
Federal Reserve’s Stance and Global CBDC Delays
The Federal Reserve has maintained a cautious approach to CBDCs, with Chair Jerome Powell recently stating that the central bank has no intention of pursuing a digital dollar under his leadership.
This declaration, made during a congressional testimony, reassured lawmakers opposed to the idea, including Senator Bernie Moreno (R-OH), who directly questioned Powell on the issue.
Despite years of research, the Fed has not identified a clear need for a CBDC. A 2022 study examined both its benefits and drawbacks but failed to reach a conclusive recommendation.
A February report by the Official Monetary and Financial Institutions Forum (OMFIF) and Giesecke+Devrient Currency Technology found that 31% of surveyed central banks have delayed their CBDC plans due to regulatory uncertainties and shifting economic priorities.
Political resistance, economic pressures, and concerns over privacy have all contributed to slowing global CBDC development.
The percentage of central banks inclined to issue a CBDC has dropped from 38% in 2022 to just 18% today, signaling growing hesitation.
Looking ahead, the development of private sector-led stablecoins and the expansion of real-time payment systems like FedNow may offer alternatives to a government-backed digital dollar.
However, the legislation remains fluid, with ongoing discussions in Congress likely to shape the trajectory of digital payments in the years to come.
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