House lawmakers passed a bill May 23 that would prohibit the Federal Reserve from issuing a central bank digital currency without explicit authorization from Congress.
The bill, which passed in a 216-192 vote with support from 213 House Republicans and three Democrats, advanced out of the House Financial Services Committee back in September, though Fed officials have repeatedly said the central bank has no immediate plans to issue a CBDC and would only do so with congressional authorization.
In September, Fed Vice Chair for Supervision Michael Barr said the central bank is “a long way” from issuing a CBDC, and would only proceed “with clear support from the executive branch and authorizing legislation from Congress.” And in March, Fed Chair Jerome Powell testified before the Senate Banking Committee that the Fed cannot issue a digital dollar without congressional authorization, according to Bloomberg.
“We believe that a central bank digital currency would be detrimental to Americans’ rights to financial privacy,” said House Financial Services Committee Chair Patrick McHenry, R-N.C., on the House floor May 23.
House Majority Whip Tom Emmer, R-Minn., introduced the bill, known as the CBDC Anti-Surveillance State Act, in September with more than 50 Republican co-sponsors.
Specifically, the legislation states that the Fed “may not, absent congressional authorization, issue a central bank digital currency,” according to the bill text.
Central banks in more than 50 countries have begun studying or developing a CBDC, though the reasons behind doing so vary from country to country.
Barr said in September that the Fed has conducted "basic research" into technologies that might support a CBDC, as doing so is one way in which the central bank aims to support responsible innovation in the U.S. payment system.
The bill would need to pass the Senate before it could be signed into law by President Joe Biden.
