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The provision, dubbed the \u201cAnti-CBDC Surveillance State Act,\u201d would prevent the Fed from issuing digital dollars directly or indirectly to the public.<\/p>\n
House Republicans on Thursday, Aug. 21, introduced a new provision<\/a> to defense policy bill H.R. 3838 that would prevent the government from issuing a central bank digital currency (CBDC)<\/a> to individuals \u2013 a measure that experts say could protect the future of financial privacy.<\/p>\n The provision emphasizes that the Federal Reserve can\u2019t give financial services directly to people, hold accounts for them, or create a CBDC or anything similar. Moreover, the Fed can\u2019t get around the rules by using banks or other middlemen to issue a CBDC. <\/p>\n It also highlights an exception that the ban \u201cmay not be construed to prohibit any dollar-denominated currency that is open, permissionless, and private, and fully preserves the privacy protections of United States coins and physical currency.\u201d <\/p>\n Experts say the measures reflect growing concerns about privacy, surveillance, and the government\u2019s role in digital currency.<\/p>\n Nanak Nihal Khalsa, co-founder of Humantech, highlighted the risks of state-controlled digital money in comments shared with The Defiant, noting that the fears about privacy, transparency and fiscal responsibility are legitimate.<\/p>\n Khalsa described CBDCs as \u201cprogrammable money\u201d under state control, warning they would log every transaction on a government ledger. \u201cThe bigger picture here is whether we build money as surveillance infrastructure or as human infrastructure,\u201d he said.<\/p>\n Earlier this summer, the House of Representatives approved the Anti-CBDC Surveillance State Act<\/a>, which would similarly ban the federal government from creating a CBDC and using it for monetary policy. The bill is slated to head to the Senate next. <\/p>\n At the time, Congressman Byron Donalds tweeted, \u201cCentral Bank Digital Currency (CBDC) would give unelected bureaucrats in our federal government absolute control over YOUR MONEY. This is wrong & this is a dangerous threat to freedom. Yesterday, the House voted 219-210 to BLOCK this globalist tyranny from infiltrating America.\u201d <\/p>\n Meanwhile, U.S. Treasury Secretary Scott Bessent earlier this year expressed strong opposition to the idea of a CBDC<\/a>, calling it a \u201csign of weakness.\u201d Bessent added that he would not support the Federal Reserve issuing a digital currency.<\/p>\n Khalsa also pointed out that stablecoins face similar risks, as private issuers have incentives to monitor, restrict, and profit from users\u2019 transactions. He highlighted that the main distinction is whether one places their trust in the government or a private company.<\/p>\n