Anti-CBDC Surveillance State Act
The Anti CBDC Surveillance State Act (H.R. 1919), introduced on March 6, 2025 by Rep. Tom Emmer (R MN), prohibits the Federal Reserve from issuing a central bank digital currency (CBDC), either directly or through intermediaries. It also bars the Fed from using any CBDC for monetary policy, and from conducting related tests or pilots, unless Congress explicitly authorizes it.
Where It Stands in the Legislative Process
• Introduced: March 6, 2025, and reported (amended) by the Financial Services Committee on May 6.
• Passed the House: July 17, 2025, by a vote of 219–210.
• Next Step: Awaiting action in the Senate before heading to the President for signature.
The Act was strategically attached to the must-pass National Defense Authorization Act to ensure momentum.
Key Provisions
1. Ban on Direct CBDC Issuance
o Fed cannot offer digital currency, accounts, or wallets directly to individuals.
2. Ban on Indirect CBDC Issuance
o Prohibits the Fed from issuing CBDC via intermediaries or financial institutions.
3. Prohibition on Fed CBDC Testing or Use
o Forbids testing, developing, or implementing a CBDC for monetary policy.
4. Congressional Authorization Required
o Any future Fed CBDC initiative requires explicit congressional approval.
5. Privacy Protections
o Clarifies the ban does not apply to private, permissionless digital cash that retains physical cash privacy.
Proponents: Privacy, Sovereignty & Institutional Support
• Whip Emmer argues the Act preserves financial privacy, prevents surveillance, and guards against control by unelected bureaucrats.
• Rep. Byron Donalds, echoing Trump’s stance, described CBDC as a threat to liberty and “globalist tyranny,” stressing support for private-sector innovation.
• Credit unions, the American Bankers Association, and other financial groups endorse the bill, citing the need to protect member data, preserve community banking, and prevent the Fed from displacing traditional financial services.
Critics: Falling Behind Global Trends & Policy Risks
• Financial Privacy Advocates & Economists worry the U.S. might lose ground as over 70 countries explore CBDCs—potentially weakening dollar dominance.
• Christopher Smart (FT) calls the ban “shameful,” arguing thoughtful CBDC design could safeguard privacy while enhancing international payments.
• Rep. Maxine Waters cautions that CBDCs could bolster financial stability and reduce costs, and claims the bill could hinder innovation and constrain the Fed.
Implications Across Sectors
Banking
• Preserves current model: Banks and credit unions maintain deposit relationships and customer data control.
• Hinders innovation: Without Fed-issued digital accounts, banks may need to partner with private fintechs for digital currency services.
Investment
• Stable funding: Prevents sudden deposit drains to Fed wallets.
• Potential opportunity cost: Markets may miss out on efficiency gains from a well-architected digital dollar.
Crypto & Digital Assets
• Private sector stays central: Stablecoins and permissionless digital assets continue under existing regulatory frameworks.
• Limits government competition: Crypto firms avoid facing state-issued competition in retail digital currency.
What’s Next?
The bill now moves to the Senate, where its future is uncertain. Senate leaders must balance innovation concerns with national security and privacy considerations. A final version would go to the President and, if signed, become law.
The Anti CBDC Surveillance State Act is a decisive statement against government-issued digital currency, emphasizing consumer privacy and financial freedom. Backed by major banking groups and Republicans, it shields existing financial institutions and private innovation. However, critics argue it may cede global leadership in digital finance and limit the Fed’s modernization toolkit. As the bill moves to the Senate, the outcome will determine whether the U.S maintains its cautious stance or moves forward into the CBDC landscape.
For more, check out our articles on the GENIUS Act, and the CLARITY Act, on our blog at 49thparallelwealthmanagement.com.
