The controversy over the Fed’s proposed Central Bank Digital Currency (CBDC) is heating up fast.
On Wednesday, June 7, 2023, US Congressman Alex Mooney and 14 colleagues introduced the scathing anti-CBDC bill H.R. 3712, entitled the “Digital Dollar Pilot Prevention Act.”
If passed, the bill would close a Federal Reserve Act loophole and block the Fed from testing a CBDC without Congressional approval:
“Unless authorized by an Act of Congress enacted after the date of the enactment of this act, the Board of Governors of the Federal Reserve System and the Federal reserve banks may not establish, carry out, or approve a program intended to test the practicability of issuing a central bank digital currency, including by partnering or coordinating with a private sector entity to carry out such a program.”
“Congress cannot give an inch when it comes to CBDCs. CBDCs would threaten the liberties of law-abiding Americans,” says Congressman Mooney.
Grover Norquist, president of Americans for Tax Reform, agrees and supports the bill, saying a CBDC “poses significant risks to the U.S. economy.”
Adam Brandon, president and CEO of FreedomWorks, also supports the bill, saying “We must do everything we can to prohibit unelected bureaucrats from inflicting their inflationary and repressive policies on the American taxpayer.”
And Mooney’s bill isn’t the only official attempt to block the Fed’s plans:
In February 2023, Republican Congressman Tom Emmer introduced “The CBDC Anti-Surveillance State Act” to “halt efforts of unelected bureaucrats in Washington, D.C., from issuing a central bank digital currency (CBDC) that strips Americans of their right to financial privacy.”
On March 20, Florida Governor and presidential candidate Ron DeSantis also announced he’d signed comprehensive anti-CBDC legislation into law for the State of Florida.
“The Biden administration’s efforts to inject a Centralized Bank Digital Currency is about surveillance and control. Today’s announcement will protect Florida consumers and businesses from the reckless adoption of a ‘centralized digital dollar’ which will stifle innovation and promote government-sanctioned surveillance. Florida will not side with economic central planners; we will not adopt policies that threaten personal economic freedom and security.”
Furthermore, according to the official DeSantis website, the Florida Governor believes “a CBDC is directly controlled and issued by the government to consumers, giving government bureaucrats the ability to see all consumer activity and the power to cut off access to goods and services for consumers.”
On March 9, South Dakota Governor Kristi Noem vetoed the proposed South Dakota House Bill 1119, which defines what money is, saying “The bill adopts a definition of ‘money’ to specifically exclude cryptocurrencies. But these revisions do include Central Bank Digital Currencies as money. These developments concern me for several reasons.”
On March 21, Texas Senator Ted Cruz joined the opposition with his legislation to “prohibit the Federal Reserve from developing a direct-to-consumer central bank digital currency which could be used as a financial surveillance tool.”
And, on May 3, The House of Representatives for North Carolina unanimously passed legislation prohibiting the Fed from testing a CBDC pilot in the state.
But those in favor of central bank digital currencies believe these views and efforts are misguided.
After all, we already use debit cards for everything from gas to Amazon to monthly bills. So everyday financial life would continue relatively unchanged, wouldn’t it? And a dollar, whether paper or digital, is still a dollar, isn’t it?
Transactions would be faster.
And we wouldn’t have to carry bulky cash and coins.
However, opponents argue a move to digital currency ignores the potential risks of how a proposed CBDC system would work.
The system would include a time-stamped, permanent digital ledger. And this time-stamped ledger would verify all financial transactions.
This centrally controlled digital process, says Norbert Michel, vice president and director of the Cato Institute’s Center for Monetary and Financial Alternatives, carries far too great a risk to move forward:
“The problem is that there is no limit to the level of control that the government could exert over people if money is purely electronic and provided directly by the government. A CBDC would give federal officials full control over the money going into — and coming out of — every persons’ account. This level of government control is not compatible with economic or political freedom.”
Yet, despite these concerns and multiple pieces of legislation, most Americans are still unaware of the Fed’s plan for a possible CBDC
In fact, when asked “How familiar are you with central bank digital currency (CBDC)?,” 72% of respondents said they weren’t familiar with it at all, according to the 2023 Central Bank Digital Currency National Survey by the Cato institute.
But make no mistake — plans for CBDCs are moving forward worldwide.
So far, 11 countries have launched their digital currency. And 114 countries are in some phase of CBDC development, including Canada, the United Kingdom, France, Germany, Italy, Japan, the European Union and the United States.
IMF managing director Kristalina Georgieva confirmed the efforts in her recent IMF speech entitled “The Future of Money: Gearing up for Central Bank Digital Currency”:
“We have moved beyond conceptual discussions of CBDCs, and we are now in the phase of experimentation … and central banks are building capacity to harness new technologies — to be ready for what may lie ahead.”
What “may lie ahead” is uncertain.
But if efforts to block the Fed’s digital currency plans fail, Americans may soon have two main monetary choices in a post-cash world:
Central bank digital currency issued and monitored by the Fed…
Or physical, private gold.
Are your savings prepared for a post-cash America? To learn more about your options, click here to get a FREE Gold Information Kit personalized for your needs and goals. Or call 888-529-0399 for a FREE, no-obligation consultation with a Gold Alliance Gold Specialist.