May 23, 2024 - Economy

House passes bill to prevent creation of CBDCs

A profile photo of older man speaking.

Rep. Tom Emmer, author of HR 5403. Photo: Samuel Corum/Getty

The U.S. House of Representatives has voted against the Fed putting dollars on a blockchain (or something similar).

Why it matters: Central bank digital currencies, known as CBDCs, are a growing trend around the rest of the world, but the U.S. has dragged its feet.

  • If House Majority Whip Tom Emmer (R-Minn.) has his way, explorations of CBDCs in Washington will go to a dead stop.

The latest: In a vote of 216-192, H.R.5403, the CBDC Anti-Surveillance State Act, passed Congress's lower chamber.

  • According to House staff, three Democrats voted in favor, no Republicans voted against.
  • That's a much smaller turnout from the minority than on Wednesday's crypto regulation bill.

What they're saying: "This bill is simple: It halts the efforts of this Administrative State under President Biden from issuing a financial surveillance tool that – if not done correctly - will fundamentally alter the lives of every American," Rep. Tom Emmer, the bill's author, said on the House floor Thursday.

Rep. Dusty Johnson (R-S.D.) voted for the bill, citing how the Canadian government used bank accounts to shut down the trucker protest there as one of his reasons.

Reality check: The Biden administration in 2022 encouraged the Federal Reserve to continue research into the possibility of a CBDC, but had outlined no specific plans to create one.

💭 Our thought bubble: For those not steeped in blockchain culture, it might seem surprising that Emmer, a proponent of the cryptocurrency industry, would oppose governments getting involved in the technology.

  • Technologies can be used in all kinds of ways, however, and Emmer fears that, though many cryptocurrencies so far have enhanced privacy, the U.S. government will use them to more closely scrutinize citizens.

What's next: When it comes to crypto legislation, we sound like a broken record here, but... It's on to the Senate.

Go deeper