Congressman Tom Emmer has just introduced a bill that would prevent the US Federal Reserve from issuing a central bank digital currency (CBDC) directly to local consumers, believing that the government entity would be “on an insidious path akin to China’s digital authoritarianism.”
“The Fed does not, and should not, have the authority to offer retail bank accounts,” said the Minnesota representative. “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.”
The issuance of CBDC by the Fed is also lambasted by the US lawmaker for being too centralised, which would leave the users’ personal information vulnerable for attacks.
Emmer said that a digital dollar is supposed to protect financial privacy, maintaining the dominance of the country’s fiat currency, and spurring innovation. He wrote in a Twitter thread that it is crucial for the United States to prioritise innovation and not aim to compete with the private sector.
Banks are currently able to hold master accounts with the Fed. Commercial banks would serve as the middlemen for such accounts and individual clients, and are responsible in ensuring the security of the client data. Authorities are usually required to get court orders before they could access client information.
Emmer is known for his advocacy for crypto and has been going at it for quite some time. He was one of the authors behind the letter asking the Fed’s Chief Jerome Powell to produce a report on the Fed’s CBDC work last September. Powell has recently stated that the report will be up soon.