The Republican-led House of Representatives has just passed the first-ever bill explicitly banning the Federal Reserve from creating a central bank digital currency.

On May 23, in a vote of 216–192, the US House of Representatives passed the CBDC Anti-Surveillance State Act. Assuming the bill passes the senate following debate, this will explicitly prohibit the Federal Reserve from issuing central bank digital currency to any person or institution in the US.

“For more than two years, we have worked to educate, grow support, and pass this important legislation, which prevents unelected bureaucrats from issuing a financial surveillance tool to fundamentally undermine our American values,” wrote majority whip Tom Emmer, who introduced the bill, in a news release.

According to Emmer, the bill was passed to “reverse incoherent regulation and establish new standards” and halt the Biden administration from “issuing a financial surveillance tool that… will fundamentally alter the lives of every American.”

“Unlike decentralized cryptocurrencies, a CBDC is a digital form of sovereign currency that is designed, issued, and monitored by the federal government,” explained Congressman Emmer. “It is government-controlled programmable money that, if not designed to emulate cash, could give the federal government the ability to surveil and restrict Americans’ transactions and monitor every aspect of their daily lives.

“And this is not hyperbole. We have already seen examples of governments developing these types of tools and use them to weaponize their financial systems against their citizens.”

A bill to make sure America doesn’t become more like China… or Canada

Emmer, of course, points to China and its social credit score system as an example of how it can be used as a political tool for control. But he also cites Canada as an out-of-control Western government that froze the bank accounts of peaceful protesters during the Freedom Convoy because they didn’t like the protest.

“It is naïve to believe that your government won’t weaponize the tools it has to control you. So, it shouldn’t come as any surprise that the appetite for financial surveillance can be an attractive proposition right here at home,” Emmer wrote.

“… Any digital currency issued by the government, again, must be open, permissionless, and private. It cannot be used in the way the Chinese have deployed their digital yuan to build social credit scores on their citizens based on their purchases and their behavior.”

While not a completely bipartisan vote, that some Democrats joined Republicans in voting to ban central bank digital currencies provides some reassurance that lawmakers are aware of the threat posed by CBDCs and social credit systems and are committed to ensuring America doesn’t go down the same path as China.

The bill will now go to the senate, where it will be decided whether to make it law.