"Anti-CBDC Surveillance State Act" Seeks to Ban Federal Reserve Digital Dollar Development and Issuance

This bill, the "Anti-CBDC Surveillance State Act," aims to put a hard stop on the Federal Reserve getting involved with a central bank digital currency (CBDC). It explicitly prohibits Federal Reserve Banks from issuing any form of CBDC or similar digital asset, whether directly to individuals or indirectly through banks (Sections 2, 3). The core goal appears to be preventing the creation of an official, government-backed digital dollar managed by the central bank.

Drawing a Line in the Digital Sand

The restrictions laid out are quite broad. The bill forbids the Fed not just from issuing a CBDC, but also from testing, studying, developing, creating, or implementing one (Section 4). It even bars the Fed from using a potential CBDC as a tool for managing the economy, meaning it couldn't be used to implement monetary policy. So, what exactly is a CBDC according to this bill? It's defined as digital money denominated in U.S. dollars, representing a direct liability of the Federal Reserve System, and intended to be widely available to the general public (Section 4). Think of it as a potential official digital version of the cash in your wallet, but issued and potentially tracked by the government's central bank.

What This Means for Your (Digital) Wallet

If this legislation becomes law, don't expect an official "FedCoin" or digital dollar account directly with the Federal Reserve anytime soon. The practical effect is maintaining the current financial structure – your money stays primarily in commercial bank accounts, credit unions, or as physical cash, not as a direct digital liability on the Fed's books accessible via an app. The bill directly addresses concerns about potential government surveillance and control that some associate with a centralized digital currency. However, by halting Fed research and development (Section 4), it also potentially closes off avenues for payment system innovation that a CBDC might have offered, such as potentially faster settlement times or new financial tools. There's a specific carve-out noting these prohibitions don't apply to digital dollars that are "open, permissionless, private," and maintain cash-like privacy (Section 4) – seemingly leaving the door open for private sector cryptocurrencies or stablecoins that aren't direct Fed liabilities.

The Power Question

Beyond the technical prohibitions, the bill makes a clear statement about authority (Section 5). It formally expresses the sense of Congress that the Federal Reserve doesn't currently possess the legal power under the Constitution to launch a CBDC or similar digital asset without explicit authorization from Congress. The underlying message is straightforward: if the U.S. is going to venture into the territory of an official digital dollar, Congress intends to be the body granting that permission, rather than the Federal Reserve acting independently. This positions Congress as the gatekeeper for any future government-issued digital currency initiatives.