US lawmaker proposes bill to ban the Fed from issuing CBDCs to consumers

Minnesota representative Tom Emmer has announced plans to submit a bill that would prevent the US Federal Reserve (Fed) from issuing potential digital dollars as a retail bank.

Tom Emmer – Minnesota, USA representative

In an announcement Wednesday, Emmer said The bill would prohibit the Fed from issuing central bank digital currencies (CBDCs) directly to US consumers. According to the Minnesota official, the government organization’s requirement that users open an account to access the benefits of the digital dollar would “push the Fed into the path of China’s digital authoritarianism.”

“The Fed does not and should not have the authority to provide retail bank accounts. Any CBDC implemented by the Fed must be public, license-free, and private. This means that every digital dollar must be accessible to everyone, process transactions on a blockchain that is transparent for all and must protect the data protection elements of cash. “

In addition to the claims made by the financial regulator, lawmakers also criticized the Fed’s implementation of CBDCs for being too centralized, making users’ personal data vulnerable to attack.

According to Emmer, the digital dollar should aim to protect financial privacy, maintain the dominance of the country’s fiat currency, and encourage innovation.

The bill comes just a day after Jerome Powell said the Fed would release a report on CBDCs in the coming weeks after several delays. During a confirmatory hearing before the Senate Banking Committee, the Fed chairman also replied in the affirmative when Senator Pat Toomey questioned the Federal Reserve’s ability to operate as a retail bank.

“Some have advocated that the central bank’s digital dollar be used and developed so that individual Americans have retail accounts with the Fed and that the Fed becomes America’s retail bank. . It seems to me that the Fed has absolutely no experience, expertise or ability to turn it into a retail bank, ”Toomey asked.

Emmer has previously advocated clearer regulation of digital assets through law in the United States, tipping bills in May and July 2021. He and other lawmakers have also asked questions about the Securities and Exchange Commission’s decision not to approve a Bitcoin ETF and appealed directly to SEC Chairman Gary Gensler.

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