On Monday, US Representative Tom Emmer (R-MN) declared his opposition to a central bank digital currency (CBDC) during a discussion hosted by the Federalist Society, a conservative law group. He believes that issuing a retail-facing CBDC would encroach on personal privacy and supports the idea of using a technology that closely resembles stablecoins. His CBDC Anti-Surveillance State Act seeks to centralise oversight of the tech and limit its potential for abuse of power.

Originally introduced in February, the bill was co-sponsored by nine members of Congress. Since then, 14 other Republicans have come out in support, however, according to Emmer, there is also significant support from Democrats who have not publicly made their stance known due to a lack of confidence in the current administration.

The main difference between CBDCs and stablecoins is that the latter are managed by a private company while CBDCs are issued and maintained by their respective governments or central banks. CBDCs have been advocated by some as a way to promote greater financial inclusion and remind others of the need for cash. On the other hand, Emmer and those who share his views point out the dangers in allowing the government to track the transactions and spending habits of individuals, an issue which Fed Vice Chair for Supervision Michael Barr conceded in March.

Despite the Federal Reserve’s announcement that it wouldn’t issue a retail-facing CBDC without approval from Congress, Fed Chair Jerome Powell has shown more flexibility around allowing a CBDC for financial institutions. At this point, Emmer looked to emphasise the importance of implementing a technology that echoes the values of Web3, such as that seen with stablecoins, and ensure the privacy of users is not violated. He believes that until this technology is found, no US central bank digital currency should be created to verify the rights of citizens.



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