A US Representative is introducing a bill that would prevent the Federal Reserve from issuing government-backed crypto assets directly to individuals.
Congressman Tom Emmer of Minnesota says that the Federal Reserve issuing a central bank digital currency (CBDC) would centralize the financial information of Americans, leaving them open to surveillance from their own government.
“As other countries, like China, develop CBDCs that fundamentally omit the benefits and protections of cash, it is more important than ever to ensure the United States’ digital currency policy protects financial privacy, maintains the dollar’s dominance, and cultivates innovation.
CBDCs that fail to adhere to these three basic principles could enable an entity like the Federal Reserve to mobilize itself into a retail bank, collect personally identifiable information on users, and track their transactions indefinitely.
Not only would this CBDC model centralize Americans’ financial information, leaving it vulnerable to attack, but it could also be used as a surveillance tool that Americans should never tolerate from their own government.”
CBDCs are centralized crypto assets backed by government entities that can only transact on permissioned blockchains.
Emmer’s proposal would prevent the Federal Reserve from unilaterally controlling any US digital currency. The Congressman says that any CBDC implemented by the Fed would have to be open, permissionless, and completely private to avoid digital authoritarianism.
“Requiring users to open up an account at the Fed to access a US CBDC would put the Fed on an insidious path akin to China’s digital authoritarianism.
Any CBDC implemented by the Fed must be open, permissionless, and private. This means that any digital dollar must be accessible to all, transact on a blockchain that is transparent to all, and maintain the privacy elements of cash”
In 2021, the Federal Reserve said they’d be reviewing the potential risks and benefits of issuing a CBDC. The report is still pending.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/bluefish_ds/Salamahin