A new bill would prohibit the Federal Reserve from issuing central bank digital currencies or CBDCs directly to individuals, which a Minnesota Republican warned could lead to an erosion of privacy rights.
Rep. Tom Emmer’s proposal addresses a key question in the expected creation of a U.S. digital dollar, which the Federal Reserve has said is top priority for the bank.
But Emmer warned against any plan for issuing a U.S. CBDC in which the Federal Reserve would “mobilize itself into a retail bank, collect personally identifiable information on users, and track their transactions indefinitely.”
“Not only would this CBDC model centralize Americans’ financial information, leaving it vulnerable to attack, but it could also be used as a surveillance tool that Americans should never tolerate from their own government,” he said.
Such a model would put the Fed on an insidious path akin to China’s digital authoritarianism,” he added.
China is set to officially launch its digital yuan, which critics – including members of the U.S. Congress – warn can be used by Beijing to keep track of its own citizens. Last year, three Republican senators asked the U.S. Olympic and Paralympic Committee to forbid U.S. Olympians from using the digital yuan, saying it could be used to spy on and harass Chinese citizens.