The U.S. House of Representatives on Thursday approved a bill that would prohibit the Federal Reserve from issuing a digital dollar or central bank digital currency (CBDC) without the express approval of Congress.
The legislation, known as the CBDC Antisurveillance Act (HR 5403), was approved by a majority vote of 216 to 192. Republicans have expressed concern that US CBDCs could be used for government control over citizens’ finances.
The Fed itself has yet to come up with a solid proposal to introduce a digital dollar. But the House vote reflects ongoing concerns among Republicans – including former President Trump – about the government’s potential over-involvement in such a system.
The majority in the House of Representatives, along with Tomy Emmer (Minn.), who introduced the legislation, argued that the digital dollar could be a “surveillance tool” for the government, giving it the power to track transactions and potentially restrict activity they deem politically undesirable.
His position reflects Trump’s strong opposition to CBDCs, as the current presidential candidate has promised to block its creation if re-elected.
“Such a currency would give the federal government absolute control over your money. They could take your money and you wouldn’t even know it was gone,” Trump said. Earlier this week, the American Bankers Association (ABA) urged leaders of the House of Representatives to support the bill.
Thursday’s vote represents a significant difference from the previous vote. On Wednesday, 71 Democrats and 208 Republicans passed the Financial Innovation and Technology for the 21st Century Act (FIT21).
The bill focuses on the new structure of the cryptocurrency market and gives the U.S. Futures Trading Commission more authority over digital assets. It also outlines the Securities and Exchange Commission’s approach to the sector.
The industry rejoices, but can FIT21 pass Biden’s scrutiny?
Wednesday’s vote is a landmark moment for the cryptocurrency industry. This is the first time the House has passed a bill focused solely on regulating the cryptocurrency market. But while the cryptocurrency industry celebrates the FIT21 vote, challenges remain.
Alan Mittleman, chief operating officer of Secure Digital Markets, told Cryptonews that the bill needs a companion version for the Senate. This new version will require committee amendments and will face potential opposition from high-profile cryptocurrency critics such as Senator Elizabeth Warren. In short, the bill’s path to becoming law is not yet over.
According to Mittleman, President Joe Biden seems concerned about insufficient consumer protections in FIT21. “He has not yet threatened a veto. However, this suggests that the bill may need more work to pass,” – He added.
