Having the Fed require users to open accounts to access the benefits of a digital dollar would put it “on an insidious path akin to China’s digital authoritarianism,” according to Tom Emmer.
Minnesota Representative Tom Emmer has announced he will be introducing a bill intended to prevent the Federal Reserve from acting as a retail bank in the potential issuance of a digital dollar.
In a Wednesday announcement, Emmer said the bill would prohibit the Fed from issuing a central bank digital currency, or CBDC, directly to U.S. consumers. According to the Minnesota representative, having the government entity require users to open accounts to access the benefits of a digital dollar would “put the Fed on an insidious path akin to China’s digital authoritarianism.”
“The Fed does not, and should not, have the authority to offer retail bank accounts,” said Emmer. “Regardless, 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 addition to claims of potential financial surveillance, the U.S. lawmaker criticized a CBDC rollout from the Fed as being too centralized, leaving users’ personal information vulnerable to attack. According to Emmer, a digital dollar should be aimed at protecting financial privacy, maintaining the dominance of the country’s fiat currency, and encourage innovation.
The introduction of the bill came just one day after Jerome Powell said the Fed would be releasing its report on CBDCs in the coming weeks after several delays. In a confirmation hearing before the Senate Banking Committee, the Fed chair also answered in the affirmative when Senator Pat Toomey questioned the Federal Reserve’s ability to act as a retail bank.
“Some have advocated, as you know, that a central bank digital dollar be used and developed in such a fashion that individual Americans have retail accounts with the Fed, and the Fed becomes the retail banker for America,” said Toomey. “It seems to me that there is absolutely nothing in the history, the experience, the expertise, the capabilities of the Fed, that lend the Fed to being a retail bank.”
Emmer has previously advocated for greater regulatory clarity of digital assets in the U.S. through legislation, introducing bills in May and July 2021. He and other lawmakers have also questioned the Securities and Exchange Commission’s decision not to approve a Bitcoin (BTC) exchange-traded fund, appealing directly to SEC chair Gary Gensler.