Rep. Tom Emmer (R-MN) has re-introduced a bill that aims to thwart the Federal Reserve and Biden administration’s attempts to establish a central bank digital currency (CBDC), which fellow Rep. Warren Davidson (R-OH) has called “the financial equivalent of the Death Star.”
Emmer believes such a tool could be used to infringe upon Americans’ financial privacy rights. He stated, “If not designed to be open, permissionless, and private – emulating cash – a government-issued CBDC is nothing more than a CCP-style surveillance tool that would be used to undermine the American way of life.”
Davidson has called for an outright ban and criminalization of any efforts towards creating a CBDC, arguing that money should not be programmable by a central authority but should act as a stable store of value and an efficient means of exchange, not a tool for surveillance and control.
A CBDC would essentially be a government-issued and -backed “digital dollar” that would be widely available to the general public. The Federal Reserve sees potential benefits in a CBDC, such as providing citizens with a convenient, electronic form of central bank money, supporting faster, cheaper payments, and expanding consumer access to the financial system. However, critics argue that a CBDC could create issues of autonomy and control, as it could allow the federal government to track every transaction and impose restrictions on the use of the money.
The idea of issuing digital cash to U.S. citizens was encouraged by President Joe Biden in an executive order back in March 2022. Despite opposition, it seems the Federal Reserve is moving ahead with some planning, as evidenced by a job posting for a “Senior Crypto Architect – CBDC” position with the Federal Reserve Bank of San Francisco.
Economist Eswar Prasad has discussed the “programmability” of CBDCs, highlighting the potential for government control over what can and cannot be purchased with central bank money. Davidson, along with other dissenting voices in Congress such as Sen. Ted Cruz (R-TX) and Sen. Chuck Grassley (R-IA), have expressed concern over this level of government control and surveillance. Several states, including Florida and North Carolina, have already passed laws restricting the use of CBDCs.
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