House Committee Advances Ban on CBDC
Republicans cited privacy fears in its bid to ban the digital dollar.
The US took a big step towards banning government-run digital dollar this week, breaking with global trends and potentially boosting private cryptocurrencies like Bitcoin.
The House Financial Services Committee voted 27-22 on Tuesday to advance the Anti-CBDC Surveillance State Act that would block the Federal Reserve from creating a central bank digital currency (CBDC).
"The government should never be involved in the business of creating tools for financial surveillance," said Rep. Tom Emmer (R-MN), who introduced the bill.
The bill has 114 supporters in Congress and aligns with US President Donald Trump's January order limiting the Fed's power to develop digital currencies.
Meanwhile, the rest of the world isn't waiting.
134 countries are exploring government digital currencies
66 nations have reached advanced stages of development
China has already processed billions in digital yuan transactions
Even smaller nations like the Bahamas have launched CBDCs
Is blocking a CBDC actually good for the US? The debate splits along predictable lines.
Republicans frame CBDCs as surveillance tools that threaten privacy and freedom.
Democrats like Rep. Maxine Waters counter that "banning CBDC would mean the US would lose out on innovative means of payments and lead to the dollar losing its status as the world's reserve currency."
Both sides make compelling points.
A CBDC could certainly enhance government visibility into transactions — just look at China's digital yuan.
Read: China wants 1.4B citizens to use digital yuan⚕️
The crypto industry sees the bill as good news - it could make US a safe haven for private digital currencies. Even traditional finance leaders are warming to crypto.
“Unlike decentralised cryptocurrencies, such as Bitcoin, a CBDC is a digital form of sovereign currency that is issued, monitored, and managed by a central bank,” — Tom Emmer.
What Happens Next?
The bill moves to a full House vote, where similar legislation passed 216-192 last year. The challenge lies in the Senate.
Interestingly, Fed Chair Jerome Powell may not mind the ban.
"The Fed will not develop a digital currency under my leadership," he stated in February.
For crypto investors,
Bitcoin gets a massive narrative boost as "anti-surveillance money"
Private stablecoins could fill the CBDC void (perhaps with regulation)
US positions itself as a crypto haven rather than a crypto antagonist
The debate continues, with tech innovation, financial privacy, and global influence all hanging in the balance.