U.S. House Passes Bill Banning Federal Reserve From Issuing a CBDC

BY Coindesk | ECONOMIC | 05/23/24 02:37 PM EDT By Nikhilesh De

The U.S. House of Representatives voted largely along party lines to prevent the Federal Reserve from issuing a central bank digital currency.

The CBDC Anti-Surveillance State Act, introduced by Majority Whip Tom Emmer (R-Minn.), seeks to block the U.S. central bank from continuing efforts toward the development of a digital dollar. Republicans expressed concerns that a U.S. CBDC could be used to control Americans.

Democrats said during debate before Thursday's vote that the concerns were overblown and a ban would block public sector innovation and research. Overall, 213 Republicans and three Democrats voted for the bill, while 192 Democrats voted against it.

Thursday's vote count is a far cry from a vote the day before, when 71 Democrats joined 208 Republicans in voting for the Financial Innovation and Technology for the 21st Century Act, a crypto market structure bill that would give the U.S. Commodity Futures Trading Commission greater spot market authority over digital assets and spells out how another key U.S. markets regulator, the Securities and Exchange Commission, can approach the sector.

Industry participants hailed Wednesday's vote, the first for a bill focused solely on crypto market issues, as a sign that the sector was finally receiving recognition as being significant.

"The House passage of FIT21 represents a watershed moment and badge of Congressional validation for the crypto industry in the United States," said Kristin Smith, who heads up the Blockchain Association, an industry lobby group.

Nicole Valentine, the director of FinTech at the Milken Institute, similarly called the passage a "welcome step."

However, both the market structure and the anti-CBDC bills seem headed toward similar fates in the Senate ? going nowhere ? given that half of congress does not have a counterpart for either piece of legislation.

Read more: U.S. House Approves Crypto FIT21 Bill With Wave of Democratic Support

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