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US House passes bill banning Federal Reserve from issuing a CBDC
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 State Anti-Surveillance Act, introduced by Majority Leader Tom Emmer (R-Minn.), seeks to prevent the U.S. central bank from continuing efforts to develop a digital dollar. Republicans have expressed concerns that a US CBDC could be used to control Americans.
Democrats said during debate before Thursday’s vote that the concerns were exaggerated and that a ban would block innovation and public sector 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 the previous day’s vote, when 71 Democrats joined 208 Republicans by voting in favor of the Financial Technology and Innovation 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 explains how other Major US markets regulator, the Securities and Exchange Commission, may move closer to the sector.
Industry participants hailed Wednesday’s vote, the first on a bill focused exclusively on crypto market issues, as a sign that the sector was finally receiving recognition as being significant.
“The House’s approval of FIT21 represents a watershed moment and a badge of congressional validation for the crypto industry in the United States,” said Kristin Smith, who runs the Blockchain Association, an industry lobbying group.
Nicole Valentine, director of FinTech at the Milken Institute, also called the passage a “welcome step.”
However, both the market structure and the anti-CBDC bills appear to be heading towards similar fates in the Senate – leading nowhere – given that half of Congress has no counterpart for either piece of legislation.