Anti-CBDC Bill Curbs Fed's Digital Dollar Authority with Cash-Like Privacy Mandates

Representative Tom Emmer, the sponsor of the U.S. House’s Anti-CBDC Surveillance State Act, has asserted that the proposed legislation could substantially restrict the Federal Reserve’s authority to issue a central bank digital currency (CBDC). Introduced in March and passed in July as part of a trio of crypto-related bills during the House’s “crypto week,” the measure requires the Fed to meet strict criteria—such as ensuring the digital dollar is “open, permissionless, and private”—to emulate physical cash before proceeding with a CBDC [1]. Emmer emphasized during a press call that the Fed currently lacks the legal framework to issue such a currency, stating, “If [the Fed] could emulate cash, then the law is going to afford them that ability, but right now, they can’t” [1].

The legislation amends the Federal Reserve Act to prohibit federal banks from issuing digital assets “substantially similar” to a CBDC, a move that could delay or complicate the Fed’s exploration of a digital dollar. While the House passed the bill with limited Democratic support, only one of the three crypto-related measures—the GENIUS Act on stablecoins—has been signed into law by President Donald Trump. The Senate is expected to prioritize the Digital Asset Market Clarity (CLARITY) Act on market structure and Emmer’s CBDC bill after its August recess. Senate Banking Committee Chairwoman Cynthia Lummis has advocated for an extended session in August to address Trump’s nominations and crypto legislation, but Republican leaders appear to favor expediting the CLARITY Act ahead of October [1].

The Anti-CBDC bill reflects a broader ideological divide over digital currency governance. Proponents argue that the bill safeguards financial privacy and prevents government overreach, aligning with decentralized finance principles by requiring CBDCs to be “open and permissionless.” Critics, however, caution that the restrictions could hinder the Fed’s ability to modernize payment systems and compete globally. The bill’s requirement for the Fed to mirror physical cash’s anonymity may conflict with its traditional role in monetary policy and regulatory oversight [2].

Political dynamics will likely shape the bill’s fate. While Emmer’s measure remains on the Senate’s radar for September, Republican leaders have signaled a preference for the CLARITY Act, which addresses market structure. Lummis, who chairs the Senate Banking Committee’s digital assets subcommittee, has committed to advancing Trump’s agenda but has not outlined a specific timeline for the CBDC bill. With the Senate scheduled to recess until August 3, legislative momentum for crypto-related measures remains uncertain [1].

The debate underscores tensions between innovation, privacy, and centralized control in digital finance. As the House’s action highlights the evolving regulatory landscape, the bill’s potential impact on the Fed’s strategic direction and global CBDC trends will depend on its final passage and enforcement.

Sources:

[1] [Anti-CBDC Bill Could Curb Fed's Power Over Digital Dollar](https://cointelegraph.com/news/tom-emmer-cbdc-bill-federal-reserve)

[2] [Anti-CBDC Bill Seeks to Curb Fed's Digital Dollar Authority](https://www.ainvest.com/news/anti-cbdc-bill-seeks-curb-fed-digital-dollar-authority-2507/)