Rep. Tom Emmer described a CBDC as “government-controlled programmable money” that could give the government the ability to surveil transactions and “choke out” politically unpopular activity.
Cryptocurrencies and CBDCs have become one of the most contentious topics of the upcoming US presidential election. While nominees on both sides of the political spectrum support Bitcoin, few support the issuance of a CBDC – a central bank digital currency.
A CBDC is a digital representation of a nation’s fiat currency. Although they share similar technologies, CBDCs are not the same as cryptocurrencies such as Bitcoin and Ethereum. Unlike cryptocurrencies, which are decentralised, CBDCs are issued and regulated by a central governing body, such as a central bank.
The Republican party is particularly opposed to the idea of a CBDC. On September 12, House Majority Whip Tom Emmer (R-Minn) reintroduced a piece of legislation that aims to prevent the Federal Reserve and its banks from issuing a digital version of the dollar.
The legislation, known as the CBDC Anti-Surveillance State Act, aims to “halt the efforts of unelected bureaucrats in Washington, D.C. from issuing a central bank digital currency (CBDC) that dismantles Americans’ right to financial privacy”.
At present, 130 countries representing roughly 98% of the global economy are looking into CBDCs. China has already started to pay some government employees in a CBDC known as e-CNY, which digitally represents the Yuan.
Even Mastercard is looking into CBDCs: Last month, the payments giant partnered with Ripple, Consensys and more to “explore the benefits and limitations” of CBDCs, as well as how to safely implement them. Mastercard said that CBDCs are gaining momentum because they are “far less speculative” than cryptocurrencies, prompting the title: ‘is safe the new sexy?’
Read more: Chinese city becomes first to pay employees in CBDC, but is there a privacy risk?
In his remarks, Rep. Emmer described CBDCs as “government-controlled programmable money” that have the potential to give the federal government the ability to surveil transactions and “choke out politically unpopular activity”.
He said, “The administration has made it clear: President Biden is willing to compromise the American people’s right to financial privacy for a surveillance-style CBDC. That’s why I’m reintroducing my landmark legislation to put a check on unelected bureaucrats and ensure the United States’ digital currency policy upholds our values of privacy, individual sovereignty, and free-market competitiveness.”
While the Biden administration hasn’t formulated any plan to introduce a CBDC, the Federal Reserve has started to conduct research into the efficacy of digital currencies, particularly in terms of monetary policy.
Ron DeSantis: “CBDCs are Big Brother’s Digital Dollar”
Back in May, Florida Governor and presidential hopeful Ron DeSantis went as far as banning CBDCs from the state of Florida, calling them “Big Brother’s Digital Dollar“.
The Governor said: “I think anyone with their eyes open could see the dangers that this type of an arrangement would mean for Americans who want to exercise their financial independence, who would like to be able to conduct business without having the government know every single transaction that they’re making in real time.”
Read more: “Big Brother’s Digital Dollar”: What are CBDCs and why has Florida banned them?.
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