Emmer, House Financial Services Republicans file comments on possible U.S. digital currency

U.S. Rep. Tom Emmer (R-MN) is among two dozen Republican members on the U.S. House Financial Services Committee who joined together to provide comments on the possibility of a U.S. Central Bank Digital Currency (CBDC). 

The Federal Reserve in January released its discussion paper, “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” and called for comments by May 20. Rep. Emmer and his colleagues provided comments in a May 18 letter sent to Jerome Powell, chairman of the Board of Governors of the Federal Reserve System. 

“As the Fed considers its next steps, we believe it is necessary to first understand the problems a CBDC would solve,” the lawmakers wrote. “Moreover, we believe the Fed should understand whether the benefits of a CBDC outweigh the risks to commercial banks, the existing payments system, and consumers.”

In their letter, which is led by U.S. Reps. Ann Wagner (R-MO) and Patrick McHenry (R-NC), vice ranking member and ranking member, respectively, of the House Financial Services Committee, the Republicans reiterated their principles released in November 2021 to guide the discussion on a potential CBDC in the United States. 

Rep. Emmer helped develop the principles, along with committee members including Rep. Wagner, as well as U.S. Reps. Bill Huizenga (R-MI), Frank Lucas (R-OK), Andy Barr (R-KY), French Hill (R-AR), Bryan Steil (R-WI) and Anthony Gonzalez (R-OH).

“Without caution, a U.S. central bank digital currency could put us on track to China’s digital authoritarianism,” said Rep. Emmer, who wants “to examine what problems a central bank digital currency would solve before we develop and launch one.”

“Any United States CBDC must be open, permissionless, and private — like cash,” he said in a separate May 19 statement. “Anything less is a disservice to the American people and our democratic values.”

The members’ principles, they wrote, coalesce around many of the questions to which the Fed is seeking comments, and as the Fed moves forward, it should focus on four specific areas: Identifying the inefficiencies in the U.S. payment system and whether a CBDC solves them; ensuring future digital currency policies continue to promote private-sector innovation and foster competition; providing a detailed analysis on the possible impact of a CBDC on the Fed’s monetary policy tools and decision-making; and fully understanding the potential impact a digital currency would have on Americans’ civil liberties and privacy rights before any legislative action is considered. 

“The Fed has acknowledged that ensuring adequate security for a CBDC would be challenging,” Rep. Emmer and the lawmakers wrote. “Further examination is needed regarding how the Fed will balance privacy rights and transparency, particularly as it relates to deterring criminal activity and when anti-money laundering concerns are present.”