There is a hypothesis that the central bank digital currency, or a CBDC, will pave the way for the end of civil privacy when all transactions are put under surveillance.
The U.S. Fed has put great effort into exploring a digital dollar, but some members of Congress think issuing a CBDC might not be a good idea.
Representative Tom Emmer, also known as the Crypto King of Congress, announced today in a series of tweets the introduction of a bill that aims to prevent the Federal Reserve from rolling out the CBDC.
The U.S. Congressman’s bill is supported by Republican colleagues like the Official account of Rep. French Hill, Rep. Mike Flood, Rep. Warren Davidso, Rep. Andy Biggs, and Rep. Byron Donalds, among others.
Called ‘CBDC Anti-Surveillance State Act’, the bill seeks to protect U.S. citizens’ financial privacy,’ the bill focuses on bringing protection against the issuance of CBDC, which gives the central bank the ability to monitor and control the economy, according to the tweet.
Financial surveillance is an invasion of privacy.
Every digital version of the dollar, as stated by the Congressman, has a duty to protect “American values of privacy, individual sovereignty, and free market competitiveness. Anything less opens the door to the development of a dangerous surveillance tool.”
If enacted, Emmer called for the Fed’s transparency during the CBDC initiative and regular updates on the pilot projects, which have been ongoing since last year. The bill also marks a vital step toward upholding America’s leading standing in the technology area.
“After all, America remains a technological leader not because we force innovations to adopt our values under regulatory duress but because we allow technology that holds these values at their core to flourish,” Emmer highlighted.
A Dangerous Path
The issuing of an American CBDC is still in question. The Fed, on the other hand, began a pilot project in November 2022 to test the feasibility of creating a digital dollar. It’s worth noting that a pilot project has progressed beyond research and is nearing completion.
Fed officials previously underlined the significance of the central bank creating the digital currency.
The initiative by various countries, most notably China, to issue CBDCs has spurred debate at the Fed on the matter. Clearly, the central bank is concerned that the digital yuan may weaken the US dollar’s position as a worldwide reserve currency.
Fed Chairman Jerome Powell also addressed the rapid expansion of digital currencies such as bitcoin, despite the fact that he believes they are currently inefficient payment mechanisms.
Central Banks Want CBDCs
The Fed has been working on payment systems and expects to produce a product called FedNow, most likely in 2023, that will solve many of the challenges associated with the requirement for immediate transactions as well as with persons who do not have a bank account.
The agency is still weighing the benefits and dangers of issuing a digital dollar. A final decision has not been made, and Fed officials have stated that the issue plan will still require legislative approval.
Aside from the prospective CBDC launch, the U.S. government is said to be working on tightening crypto rules. The United States Treasury Department has taken moves to restrict cryptocurrency marketplaces and trading.
The U.S. Securities and Exchange Commission (SEC) has initiated a series of legal actions against companies that provide crypto services in the last month for the same reason: security legislation violations.
The action is part of the SEC’s ongoing efforts to combat security breaches and promote improved compliance.
The emergence of cryptocurrency has become intimidating for central banks as this non-government-controlled digital currency is used more in domestic and international transactions.
But the CBDC rollout just simulates further crypto adoption, according to the industry players. The Fed-issued digital currency will be unable to reduce the cryptocurrency’s value when people realize they have lost their privacy using it.