The US House of Representatives approved H.R. 5403, known as the CBDC Anti-Surveillance State Act, introduced by Majority Whip Tom Emmer (MN-06).

The legislation aims to block the development and issuance of a central bank digital currency (CBDC) without explicit congressional approval, with the goal of protecting Americans’ financial privacy.

It seeks to prevent unelected officials from creating a CBDC that could potentially intrude on individuals’ financial privacy. Specifically, it bars the Federal Reserve from offering certain products or services directly to individuals and limits the use of CBDCs for monetary policy purposes.

Key provisions include prohibiting Federal Reserve banks from offering services directly to individuals, holding accounts on behalf of individuals, and introducing any form of CBDC without congressional consent.

Furthermore, it limits the utilization of CBDCs for implementing monetary policy, ensuring that such measures uphold the privacy safeguards provided by physical currency.

This legislative action is prompted by concerns that a CBDC could be utilized to monitor and control financial transactions, as observed in other nations.

Chairman of the House Financial Services Committee, Patrick McHenry, endorsed the bill, citing worries regarding financial surveillance. He referenced instances from countries like China, where a CBDC is employed to oversee and regulate citizens’ spending patterns.

McHenry emphasized:

“This type of financial surveillance has no place in the United States.”

He underscored the significance of the bill amidst the Biden Administration’s push for CBDC research and development, arguing that it could jeopardize financial privacy.

McHenry credited Emmer and other co-sponsors, including French Hill and Alex Mooney, for their contributions in advancing the legislation.

H.R. 5403 garnered widespread support, reflecting widespread apprehension over potential misuse of digital currency by government entities. Its passage signifies a crucial step in safeguarding financial privacy in the digital era.

Emmer stressed that the bill aims to prevent the federal government from emulating authoritarian regimes that utilize digital currencies for surveillance purposes.

The bill will now proceed to the Senate for deliberation. If enacted, it would significantly curtail the Federal Reserve’s ability to implement a CBDC without legislative oversight, reinforcing Congress’ authority in major financial matters.