President Joe Biden and his administration are attempting to develop an “authoritarian-style” and “surveillance-style” digital U.S. dollar through executive orders, warned House Majority Whip Tom Emmer (R-Minn.) on Feb. 28.
The bill, which has several Republican co-sponsors, including Rep. Andy Biggs (R-Ariz.) and Rep. Young Kim (R-Calif.), would also ensure that the Federal Reserve is held accountable in its research and development of a digital dollar.
“The consequences, if we get it wrong, are far too serious,” Emmer said at a news conference. “The Biden administration is currently itching to create a digital authoritarian-style, surveillance-style digital dollar through an executive order.”
The bill, Emmer says, would restrict the central bank from issuing a CBDC or using a CBDC to implement monetary policy and control the national economy.
He added that efforts to digitize the U.S. dollar need to be transparent and protect Americans’ right to financial privacy. Developing a digital version of the greenback must enhance financial inclusion, ensure transactions are efficient, and refrain from threatening Americans’ privacy or sovereignty.
“We need these common-sense guardrails to prevent unelected bureaucrats here in Washington from sacrificing Americans’ right to financial privacy,” he said. “We do not want to emulate the CCP. We should not be taking our direction from the Communist Party of China.”
Bullish on a CBDC?
Over the past couple of years, the Fed and the Treasury Department have published several CBDC-related reports.For now, the central bank hasn’t decided on issuing a CBDC or how to implement a system, but policymakers and researchers are assessing the technology, says Michael Neal, executive vice president and head of markets at the Federal Reserve Bank of New York.
“Given the dollar’s important role, Federal Reserve System seeks to further understand the cost and benefits of the potential technologies for central bank digital currencies, and how the system better understand this emerging field,” the San Francisco Fed Bank wrote.
Central banks worldwide have started exploring CBDCs as these entities try to catch up with China after the world’s second-largest economy introduced its Digital Currency Electronic Payment, also known as an e-yuan, in April 2021.
“But to move to the next stage, which would be to build a working prototype, to test in a simulated environment and then you’d be into testing in a live environment, then implementation. This next phase is designed to put us in a position to do that,” Cunliffe stated.
“Our hope is that the pilot program will lead to improved designs through discussion with private businesses,” BOJ Executive Director Shinichi Uchida, adding that these efforts would ensure the BOJ would be prepared in the event the federal government chose to adopt and issue a digital yen.