Bill Seeking To Ban Fed From Issuing Crypto To Consumers Proposed

A bill seeking to ban FED from issuing crypto to consumers was proposed recently by Tom Emmer due to privacy dangers posed by the Chinese digital yuan so let’s read further in today’s crypto latest news.

The proposed law will prevent the FED from giving CBDCs accounts to consumers and the sponsor of the bill Tom Emmer said that CBDCs pose a threat to privacy. The bill seeking to ban the FED from issuing a central bank digital currency came at a time when the central banks around the world including the Fed, are considering introducing a digital version of their own national currency as China did already.

In a press release describing the bill, Emmer warned that the digital currency issued by the FED will be a risk where consumers could be one day forced to register with the central bank to gain access to money which could turn to mass surveillance of the financial activity. Emmer’s concern is not hypothetical given china’s government already using the new digital yuan to monitor its citizens. Emmer stated:

“Requiring users to open up an account at the Fed to access a U.S. CBDC would put the Fed on an insidious path akin to China’s digital authoritarianism. It is important to note that the Fed does not, and should not, have the authority to offer retail bank accounts.”

It should be noted however that there’s no indication that the Biden Administration or the FED is considering launching a central bank digital currency account for Americans. While creating a CBDC that the Americans can access via the FED, could bring new convenience and efficiency when it comes to paying taxes or reciting stimulus payments but some lawmakers raised concerns that these benefits could be outweighed by the privacy threats. In the meantime, offering CBDCs directly to consumers will lead to a situation where the American transfers their deposits to the FED and will leave the commercial banks without capital to lend.

The bill is very short and calls for adding a paragraph to the Federal Reserve Act that states the Federal Reserve Banks could not offer products or services to an individual and to maintain 4 an account on behalf of an individual or even issue a central bank digital currency directly to an individual. The bill and Emmer’s announcement don’t seem to preclude the FED from developing a CBDC for other purposes outside of the consumer accounts. The bill doesn’t have sponsors yet and it won’t likely get much traction because Emmer is a republican and a minority in the House of Representatives. While he takes a hard lien on CBDCs for consumers, he is not opposed to crypto in general as he became one of the few lawmakers to tweet about the crypto-friendly greeting. His announcement came a day after the FED Chair Jerome Powell told the Senate about a long-awaited report by the central bank on CBDCs and stable coins issuance in the upcoming weeks.