US House votes to ban digital currency from Federal Reserve central bank

The US House of Representatives voted Thursday to ban the Federal Reserve from directly issuing a central bank digital currency (CBDC) to its citizens.

The CBDC State Anti-Surveillance Act bill won the support of 213 Republicans and 3 Democrats, making the final tally 262 yes and 192 no.

Republicans pass another crypto bill

The bill, introduced by pro-crypto Representative Tom Emmer (R-MN), marks the third crypto-focused legislation passed by Congress this month, and has been largely celebrated by the online crypto community that favors the coins decentralized and trustless like Bitcoin. .

“My legislation ensures that America’s digital currency policy remains in the hands of the American people so that any development of digital money reflects our values ​​of privacy, individual sovereignty, and free market competitiveness.” he wrote Emmer on Twitter after the bill passed Thursday.

Unlike Bitcoin, CBDCs are controlled and issued directly by a central bank, and are backed by or used as a substitute for a nation’s fiat currency. Some CBDCs in other countries, such as China’s digital yuan, are also used to track consumer purchases and help determine each citizen’s social credit score.

Rep. French Hill (R-AR) supported the bill because of the dangers of this power exercised by the State, highlighting when Canadian Prime Minister Justin Trudeau froze the bank accounts of citizens who donated to the anti-vaccine mandate protests in 2022.

“We don’t need a retail central bank digital currency – we have a payment system that can capitalize on the private sector,” Hill said during remarks at the debate on Thursday. “For example, private sector payment stablecoins are a fantastic innovation.”

Democratic opposition to crypto legislation

Democrats like Maxine Waters (D-CA), ranking member of the Financial Services Committee, responded that the United States could lead the world in issuing a privacy-friendly CBDC, rather than allowing the digital yuan to gain dominance .

“This bill is an attempt to stifle US innovation and competitiveness abroad, and to undermine the federal agency most critical to fighting inflation,” he added.

On Wednesday, the House also passed the Financial Technology and Innovation for the 21st Century Act (FIT21), which set clear rules for how cryptocurrencies and crypto companies must register with federal market regulators.

Unlike Thursday’s bill, FIT21 received substantial bipartisan support, with 71 Democrats voting in favor.

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