Congressman Tom Emmer is sounding the alarm on the Biden administration’s push for a central bank digital currency (CBDC). He believes this could jeopardize American values and infringe on citizens’ privacy.
Also Read: The Bank of Israel to Roll Out Sandbox for CBDC Experiments
Emmer insists that the administration is itching to trade Americans’ right to privacy for a “CCP-style surveillance tool.” The Congressman worries that if a CBDC isn’t designed to be open, permissionless, and private, it could give the federal government access to individuals’ transaction data and the ability to suppress politically unpopular activities.
Emmer Makes a Call to Action
In his speech to the House of Representatives, Emmer highlighted recent examples of governments weaponizing financial systems against their citizens. He referenced Canada’s 2022 action of freezing the bank accounts of truckers protesting vaccine mandates as a case in point. The Congressman fears this could happen in the United States if CBDCs are adopted without strict rules.
Unlike decentralized digital assets such as Bitcoin, CBDCs are a digital form of sovereign currency designed, issued, and monitored by the federal government.
Tom Emmer
Emmer introduced the CBDC Anti-Surveillance State Act to address these concerns, which has gotten support from 165 Republican conference members. This bill ensures that Congress retains authority over U.S. digital currency policy. According to him, the goal is to protect American privacy values, individual sovereignty, and free-market competitiveness.
Federal Reserve Will Weaponize the CBDC
Emmer clearly warns that the Biden administration is eager to develop a CBDC that could be used to monitor and control Americans. He cites the Federal Reserve’s description of CBDCs as one of their key duties as evidence of this intent.
Any CBDC would need to strike an appropriate balance between safeguarding the privacy rights of consumers and affording the transparency necessary to deter criminal activity.
Federal Reserve
Also Read: South Korean Central Bank Accelerates Plans for CBDC Rollout
The Federal Reserve added that while Americans have commonly kept their money in digital forms like bank accounts, payment apps, or online transactions, a CBDC would differ from current digital money. This is because a CBDC would be a liability of the Fed rather than a commercial bank.
Many Central Banks Are Interested in CBDCs
Over the past five years, most central banks globally have explored the possibility of issuing a CBDC. The motivations vary from country to country. For instance, in small island nations like the Bahamas, the main goal is to improve financial inclusion due to limited access to banks and vulnerability to natural disasters. In countries like the United Kingdom, the push is to “future-proof” money as people use less paper cash.
Despite the varying reasons, the trend is clear. According to Atlantic Council research, as of March 2024, 134 countries are exploring a CBDC. This includes 38 ongoing pilot projects in Europe and Japan. Emmer believes that this global trend should not blind the U.S. to the potential risks posed by CBDCs.
Cryptopolitan reporting by Jai Hamid
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