Republicans Push Back Against Central Bank Digital Currencies (CBDCs)

Written by Andrew Collins.

On May 23, 2024, the Republican-controlled U.S. House of Representatives made a significant move against the implementation of central bank digital currencies (CBDCs). They passed the CBDC Anti-Surveillance State Act (H.R. 5403), which prevents the Federal Reserve from:

  • Issuing a CBDC without Congress’s explicit approval
  • Using a CBDC to set monetary policy
  • Maintaining financial accounts for individuals, an idea proposed by Biden nominee Saule Omarova

Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Committee, stated, “This bill is straightforward. It halts unelected bureaucrats from issuing a central bank digital currency that would be detrimental to Americans’ right to financial privacy. We’ve seen examples of governments weaponizing their financial system against their own citizens. The Chinese Communist Party uses a CBDC to track spending habits, creating a social credit system. That type of financial surveillance has no place in the United States.”

Opposition from the Globalists

The Atlantic Council, a globalist organization, firmly opposed the bill in their editorial, “Don’t Let the US Become the Only Country to Ban CBDCs.” They argued that if the bill became law, the U.S. would be the only country to ban CBDCs, which would be a self-defeating move in the future of money. This decision could undermine the national security role of the dollar, accelerating the development of alternative payment systems bypassing the dollar in cross-border transactions. This, they claim, would make U.S. sanctions less effective.

Authors Josh Lipsky and Anaanya Kumar labeled the bill “a solution in search of a problem,” citing Fed Chair Jerome Powell’s statement that he wouldn’t implement a CBDC without congressional approval. The bill must now be approved by the Senate and President Biden. Given the partisan nature of the vote, its success is uncertain, but its passage in the House sends a strong message.

Understanding CBDCs

If you’re not familiar with CBDCs, here’s a quick overview:

  • A CBDC is a digital currency like Bitcoin or Ethereum but issued by a country’s central bank.
  • The central bank would maintain your account balance instead of an independent regional bank.
  • A CBDC is “programmable,” giving governments and central banks more control over fiscal policy.

For instance, a government could issue a stimulus payment that must be used within a certain time frame or only on specific items to manage inflation. Conversely, governments could use a CBDC to track and control economic activity. If a government wanted to ban tobacco products without legislation, it could exclude them from being purchased with CBDC.

This may sound like a dystopian sci-fi scenario, but it’s a real possibility. High-level individuals at Bank of America, the International Monetary Fund, and the World Economic Forum have openly discussed the control CBDCs would provide. A CBDC could be likened to a “One Ring” for a nation’s economy, giving unprecedented power to those in control.

Our Take

The push against CBDCs is a crucial stand for financial privacy and freedom. The potential for abuse with such centralized control over currency is immense. Allowing the government or central banks to monitor and dictate how money is spent threatens individual liberties and economic independence. This issue transcends political lines and touches the core of our financial system’s integrity and our personal freedoms.

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