A congressional bill is in the works to limit the power to issue CBDC. According to Tom Emmer, having the Federal Reserve require consumers to open accounts in order to access the benefits of a digital currency would set the country on an insidious path analogous to China’s digital totalitarianism.
Representative Tom Emmer of Minnesota has indicated that he will introduce legislation to restrict the Federal Reserve from acting as a retail bank. This is on the possibility of the issuance of a digital dollar in the future.
Emmer stated that the law would bar the Federal Reserve from issuing a central bank digital currency, or CBDC. Especially, directly to consumers in the United States. He stated this in a released statement on Wednesday. Making it necessary for users to open accounts in order to profit from the benefits of a digital dollar. Furthermore, this would set the Fed on an insidious path that is reminiscent of China’s digital despotism. This is according to the Minnesota congressman.
It is Emmer’s opinion that the Federal Reserve should not have the ability to offer retail bank accounts. However, any CBDC established by the Federal Reserve must be open, permissionless, and private in nature. For a digital dollar to work, it needs to be available to everyone. In addition, the transactions on a blockchain should be transparent to everyone and retain the privacy features of currency.
The U.S. legislator expressed concern about the Federal Reserve’s CBDC deployment.
Some lawmakers think of the Federal Reserve’s CBDC as overly centralized. This makes their users’ personal information vulnerable to theft or hacking. According to Emmer, a digital dollar should be geared at protecting financial privacy. He emphasizes the importance of security in transactions and plans like this. In addition to preserving the dominance of the country’s fiat currency, and encouraging innovation.
The congressional bill introduction comes just one day after Federal Reserve Chairman Jerome Powell stated that the Fed would release its report on CBDCs in the coming weeks. The report was following repeated delays. Senator Pat Toomey, who was questioning the Federal Reserve’s authority to act as a retail bank. This was during his confirmation hearing before the Senate Banking Committee. He received an affirmative response from the Fed chair during the hearing.
Some have advocated, as you know, that a central bank digital dollar be used and developed in such a way that individual Americans have retail accounts with the Fed. The Fed becomes the retail banker for America. It appears to Senator Pat Toomey that there is simply nothing in the Federal Reserve’s history, knowledge, or capabilities that would preclude it from serving as a retail bank.
Emmer has previously advocated for increased regulatory certainty surrounding digital assets in the United States. This is done through legislation, submitting measures in May and July of 2021, respectively. Additionally, he and other members of Congress have questioned the Securities and Exchange Commission’s decision. This is regarding the unapproved Bitcoin (BTC) exchange-traded fund. They showed their concerns regarding the matter by writing directly to SEC Chairman Gary Gensler to express their concerns.