A pair of Republican lawmakers is calling for a permanent ban on a US central bank digital currency (CBDC) to be enshrined in the 21st Century ROAD to Housing Act, as the measure is expected to come up for a vote in the US House this week.
The bill released by the US Senate Committee on Banking, Housing and Urban Affairs in March mainly concerns revisions to federal housing programs but also includes a section banning the Federal Reserve System or any Federal Reserve bank from issuing a CBDC or similar instrument until Dec. 31, 2030.
The US House has created its own amended bill, which Congressman Mike Flood said reverses the “backdoor green light for a CBDC” and aims to make the ban permanent.
The amended legislation is expected to go to a vote in the House this week. If it passes, the bill will return to the Senate, where it could undergo further amendments. The legislation must pass both chambers before it can go to President Donald Trump’s desk to be signed into law.
Critics of CBDCs often cite their potential for misuse. The Human Rights Foundation said the benefits of CBDCs include the potential to expand financial inclusion for populations with limited access to the financial system. Drawbacks include the currency’s potential to infringe on privacy and open new avenues for government corruption, among other concerns.
Ban needs to be made permanent, representative says
US Representative Warren Davidson, a member of the House, also supported a permanent CBDC ban as the “2030 sunset works a pre-launch development period.”
“The US House of Representatives could deliver a unifying win this week with bipartisan housing affordability legislation. Instead, they currently plan to deliver a go-live date for Central Bank Digital Currency, using housing as the Trojan Horse,” he added.
Source: Warren Davidson
The American think tank The Atlantic Council’s tracker lists only three countries that have officially deployed a CBDC: Nigeria, Jamaica, and the Bahamas, while 41 others are in the pilot phase.
Alternate bills to ban a CBDC on the sidelines
Meanwhile, Tom Emmer, the House majority whip, one of the top Republican leadership positions in Congress, is advocating for his Anti-CBDC Surveillance State Act.
The bill passed the House on July 17 but has yet to receive full Senate approval. It aims to block the Federal Reserve from creating or issuing a CBDC.
Source: Tom Emmer
“The Chinese Communist Party uses a central bank digital currency (CBDC) to surveil and control its people. If the US adopted its own CBDC, privacy and economic freedom as we know it would cease to exist,” he said.
Related: Bank of Korea governor backs CBDCs, deposit tokens in first address
“My Anti-CBDC Surveillance State Act BANS our government from ever creating this Orwellian tool. The House passed it. Now, the Senate must act.”
Previously, Senator Mike Lee introduced the “No CBDC Act” as a standalone bill prohibiting the Fed or Treasury from issuing a CBDC. However, it stalled in Congress.
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