U.S. House of Representatives Approves CBDC Anti-Surveillance State Act Amid Heated Debate
Summary:
The U.S House of Representatives passed the CBDC Anti-Surveillance State Act on May 23, awaiting further approval from the Senate. The act forms an amendment to the Federal Reserve Act, prohibiting Federal Reserve banks from directly offering specific services to individuals and using central bank digital currencies for monetary policies. The bill, with dominant Republican support, stirred discussion about potential blockchain misuse and the global status of the U.S. dollar. Still, it was criticized for its drafting quality and potential implications.
On May 23, the CBDC Anti-Surveillance State Act was approved by the U.S House of Representatives, a decision based largely on party lines. This law, which awaits Senate approval, seeks to amend the Federal Reserve Act of 1913 by forbidding Federal Reserve banks to offer specific services or products directly to individuals and by preventing the use of central bank digital currencies (CBDCs) for monetary policies, among other resolutions. The bill, which garnered chiefly Republican support, saw a conspicuously low attendance during discussions. The supporters, mostly Republicans, expressed their concerns about the potential misuse of a CBDC, while Democrats were focused on the areas of innovation, the competitive status of the dollar internationally, and poor drafting of the legislation.
Chair of the Financial Services Committee Subcommittee on Digital Assets, Financial Technology and Inclusion, French Hill, stressed on the implications of government overreach. Mike Flood, a representative, urged those in attendance to visualize their least favored politician wielding control over CBCD.
Warren Davidson, member of the Financial Services Committee, critiqued the Project Hamilton of the New York Fed, comparing it with China's digital yuan and the potential that it has to evolve. He suggested that the Fed should be compelled to respond to legislations since it was unresponsive to dialogues.
Similar sentiments were echoed by Rep. Alexander Mooney, who authored a proposed amendment to the bill that curtailed CBDC research. He expressed his opinion that a CBDC should not be readily accessible.
The legislative implications were a subject of heated debates, with Brad Sherman branding the bill as meaningless jargon that favored cryptocurrency enthusiasts. However, according to him, the use of CBDSs would be voluntary, not mandatory.
In contrast, Maxine Waters, ranking member of the Financial Services Committee, noted that the bill could also unintentionally prohibit wholesale CBDCs. Waters warned that this legislation could pose a threat to the global dominance of the U.S dollar and possibly ban the Federal Reserve's hold on bank reserves, a necessity for managing payment systems.
She highlighted a technology, the zero-knowledge proof, which could ensure consumer privacy. She added that while stablecoins pegged to the dollar could lose their value in a run, a CBDC possibly could not.
Jake Auchincloss, a member of the Financial Services Committee, suggested his draft law, the "Power of the Mint Act," which he said would achieve similar results without the detriments of the current proposed act, but it had been vetoed by the Republicans.
Introduced by Rep. Tom Emmer in February 2023, the CBDC Anti-Surveillance State Act was passed in the House by a vote margin of 216-192.
Published At
5/23/2024 10:36:40 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.