Congressman urges Federal Reserve to steer clear of CBDCs

Minnesota Representative Tom Emmer has put forth a bill that will prevent the Federal Reserve from issuing a central bank digital dollar.

The proposal, which was filed on Wednesday, seeks to limit the Feds power in creating such currencies or floating them on the general market.

According to Emmer, allowing the Feds to dabble in central bank digital currencies (CBDCs) could easily put the agency on a path that is “akin to China’s digital authoritarianism”.

Previously, a group of US senators had nothing but criticism for China’s e-yuan which will be floated during the Beijing Olympics in February. Overall, the US has been far behind China in advancing a CBDC.

Emmer’s criticism is in line with this objection. He believes that the Feds should not have the authority to offer retail bank accounts.

“Regardless, any CBDC implemented by the Fed must be open, permissionless and private. This means that any digital dollar must be accessible to all, transact on a blockchain that is transparent to all, and maintain the privacy elements of cash”, he said.

Emmer fears that the Feds may then use a CBDC for financial surveillance and argued that a CBDC introduced by the Feds would be too centralized, which does not sit well with the US public, or its lawmakers.

This comes just in time as Jerome Powell, chair at the Federal Reserve, said that the agency would be releasing its report on CBDCs, which should shed more light in what direction these currencies are going in the US.

Presently, there seems to be no centralized push for the introduction of central bank currencies.

Emmer has been a known proponent of regulation on digital currencies. He has opted for a more clear-cut framework that would allow digital assets and any companies willing to invest in this space to feel comfortable doing so.

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Updated: 01/13/2022 — 18:00