Federal Reserve Blocked From Creating Digital Currency

(TotalConservative.com) – Both major parties came together in the House of Representatives to advance new legislation that would prevent the Federal Reserve from creating a digital currency of its own.

On Thursday, May 23, the House voted to advance a bill that could block the Federal Reserve from establishing a central bank digital currency (CBDC). Three Democrats united with all Republican representatives to pass the CBDC Anti-Surveillance State Act in a vote of 216 to 192.

The three Democrats who crossed the aisle are Reps. Mary Peltola of Alaska, Marie Gluesenkamp Perez of Washington, and Jared Golden of Maine. The act was spearheaded by Republican House Majority Whip Tom Emmer of Minnesota and supported by GOP House Financial Services Committee members. Emmer said lawmakers spent over two years working on educating, growing support, and passing the bill, which he said is intended to prevent “unelected bureaucrats” from undermining American values by issuing CBDC as “a financial surveillance tool.”

One of the criticisms of centralizing a digital currency is that all transactions exist on a publicly available ledger called the “blockchain.” Although that would create transparency in areas where it may be needed, such as amongst those in power, it would also deprive the average person of being able to deal with cash off the record and could potentially eliminate physical cash altogether.

The bill will now advance to the Senate, which is controlled by the Democratic Party, and it remains unclear if they will take it up with the rigor as House Republicans did. If it passes and President Joe Biden signs it, the law would represent a major step toward setting limits on the government’s regulation of cryptocurrency and preventing central banks from controlling the technology.

Opponents of the bill, such as Democratic Rep. Maxine Waters of California, argued that it could potentially “halt digital asset innovation” for the federal government’s uses. Waters said prohibiting all forms of CBDC could threaten “the very primacy of the US dollar.” She noted that other nations were already “racing forward with CBDC development” and that America would fall behind.

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