The United States House Committee on Financial Services has recently approved the "CBDC Anti-Surveillance State Act." This act prohibits the Federal Reserve from issuing a Central Bank Digital Currency (CBDC), a digitised form of the fiat currency operating on Digital Ledger Technology (DLT).
Rep. Patrick McHenry, the committee's chair, stated that the Bill would ensure that any US CBDC gets explicitly authorised by the Congress. He stressed the importance of safeguarding American citizens' privacy and the financial system's integrity in facing potential CBDC-related risks.
CBDCs have faced strong opposition from various US Congress members, including Tom Emmer, a Republican who expressed worries that a CBDC might provide the federal government with unprecedented oversight and control over Americans' financial activities. He cited examples like the Chinese digital yuan and Canada's actions during the 2022 truckers' protest as cautionary tales.
Others like Maxine Waters, the House committee's leading Democrat, favour the introduction of CDBCs. She voiced opposition to the bill and raised concerns about the United States falling behind other nations in the race to develop a global standard for central bank digital currencies. She criticised Republicans for taking a "deeply anti-innovation stance" on the technology, warning that it could stifle research and hinder progress.
The regulatory landscape surrounding crypto in the United States has been a source of concern for many industry players. The primary issue lies in the division of regulatory authority between the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). This division leads to uncertainty and challenges for those involved in the cryptocurrency industry, as it may not be clear which agency's rules and regulations they should follow or expect to be enforced.
Previously, the SEC has moved against prominent US crypto exchanges like Binance and Coinbase and accused them of unregistered securities operations, highlighting the lack of regulatory clarity surrounding crypto in the US. This keeps the nation behind its global contemporaries as Hong Kong, Japan, the UK, and other jurisdictions move forward with their proactive approaches to crypto regulation.
As the Bill in question moves closer to becoming a law, it stands as a significant milestone in the ongoing debate over the role of central bank digital currencies (CBDC) in the United States. With a congressional vote on the horizon, the fate of this legislation will determine whether the nation embraces private digital currency or opts for an alternative path.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash