US congressmen propose to ban the Federal Reserve from issuing a digital dollar

The authors of the bill believe that the asset can be used to spy on citizens

22.05.2023 - 14:15

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2 min

What’s new? On May 17, US House of Representatives members French Hill and Jake Auchincloss introduced a bipartisan bill banning the Federal Reserve System (Fed) from issuing a digital dollar. Lawmakers fear that a central bank digital currency (CBDC) would become a tool to spy on citizens’ spending and eventually lead to blocking their participation in the banking and payments system.

Hill’s statement

What arguments did officials make? According to Hill, under the Constitution, the power to issue CBDCs belongs to Congress and the American people, not “unelected bureaucrats.” He stressed that Americans are “rebelliously independent and skeptical of government overreach.”

Hill stressed the importance of protecting consumers and preventing the use of digital currency “from being weaponized to target politically disfavored industries or activities.” The congressman urged support for a bill that protects civil liberties and the dollar’s role as the world’s reserve currency and prevents government surveillance of ordinary Americans.

Earlier, other US officials made similar arguments against the digital dollar issue. Senator Ted Cruz called CBDC an instrument of financial oversight and called for a ban on its issuance, while Democratic Party member Robert Francis Kennedy Jr. said that launching the asset would lead the country into “financial slavery and political tyranny”

In May, a ban on the use and testing of the digital dollar was approved by the authorities in Florida and North Carolina, and a resolution to ban the asset was introduced by senators in Texas. They also pointed to the possibility of central bank oversight and control over private funds and transactions.

At the same time, Fed Chairman Jerome Powell noted in March that his agency, the Treasury Department, and the White House have not reached a consensus on the advisability of launching the asset and should not expect it in the near term.

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