House Advances Bill to Ban Federal CBDC Use, Citing Privacy Concerns

The CBDC Anti-Surveillance State Act, which aims to prohibit federal banks from issuing or using central bank digital currencies (CBDCs), has gained significant traction in the US House Financial Services Committee. The bill, sponsored by Representative Tom Emmer of Minnesota, was advanced with a 27-22 vote during a markup hearing on April 2. This legislation has garnered support from various industry groups, including the Independent Community Bankers Association, the American Bankers Association, Club for Growth, Heritage Action, and the Blockchain Association. The bill's momentum is driven by concerns among Republican lawmakers about the potential threat to financial privacy posed by government-issued digital currencies. They argue that institutions like the Federal Reserve and the Treasury Department could use CBDCs to surveil Americans’ financial transactions. Emmer framed the bill as an effort to enshrine into law an executive order issued by President Donald Trump, which banned the establishment, issuance, circulation, and use of a CBDC in the United States.

Despite the bill's progress in the House, its future remains uncertain as it needs to pass through both chambers of Congress. However, Senator Ted Cruz introduced a companion bill in the Senate on March 26, indicating a coordinated push from Republican lawmakers. The political divide around the issue of CBDCs is sharpening, with financial privacy and government control at the center of the debate. Meanwhile, the Federal Reserve and other government entities continue to study the feasibility of a CBDC.

The US House Financial Services Committee also passed the Republican-supported STABLE Act, which provides a framework for regulating payment stablecoins. The legislation, titled the Stablecoin Transparency and Accountability for a Better Ledger Economy Act, was approved on April 2 with a 32-17 vote, including support from six Democrats. Introduced on Feb. 6 by Committee Chair French Hill and Digital Assets Subcommittee Chair Bryan Steil, the bill was reportedly drafted with input from Tether, the world’s largest stablecoin issuer. The STABLE Act establishes clear regulatory standards for payment stablecoins, requiring issuers to provide transparency about their operations and how their tokens are backed. Despite bipartisan support, the bill sparked controversy, particularly from prominent Democrats who criticized it as a dangerous precedent. Representative Maxine Waters, the committee’s top Democrat, voted against the bill, expressing concerns that President Donald Trump could use the legislation to legitimize a stablecoin created by his family, potentially allowing it to be used for government payments. Waters also argued that the bill could enrich Trump and his allies at the public’s expense.

These concerns follow the launch of the World Liberty Financial USD (USD1), a stablecoin issued by the Trump family’s crypto venture. There are also reports that the US Department of Housing is considering the use of stablecoins in its operations. The Senate is advancing another stablecoin-focused bill, the GENIUS Act, which aims to define oversight and reserve requirements for issuers. The Guiding and Establishing National Innovation for US Stablecoins Act was passed by the Senate Banking Committee on March 13 in an 18-6 vote. Senator Bill Hagerty, one of the bill’s sponsors, revised it after input from Democrats. Senator Kirsten Gillibrand shared that the revised GENIUS Act improved quite a bit in areas like consumer protection and regulatory authority. Both the STABLE and GENIUS Acts await floor debates in their respective chambers. There may be a coordinated effort in the coming weeks to align the two bills to avoid forming a conference committee, which would otherwise be necessary to reconcile differences between House and Senate versions.

Trump’s political moves progressed in other areas as well. Lawmakers on the US Senate Banking Committee voted to advance the nomination of Paul Atkins as chair of the Securities and Exchange Commission (SEC), moving him closer to confirmation in the Republican-controlled Senate. In an executive session held on April 3, the committee voted 13-11 in favor of Atkins serving two consecutive terms. This includes the remainder of former SEC Chair Gary Gensler’s term through June 2026 and continuing with a full term until 2031. Committee Chair Tim Scott supported Atkins, stating that he will bring more clarity to digital asset regulation. However, the nomination also sparked criticism from Democratic Senator Elizabeth Warren, who warned that Trump’s nominee could benefit people like Sam Bankman-Fried and Elon Musk. She even described these people as “billionaire scammers” trying to undermine federal agencies like the SEC. The vote came as most Democratic committee members were absent, with Warren casting proxy votes on their behalf. In the same session, the committee approved additional nominees, including Jonathan Gould as Comptroller of the Currency, Luke Pettit as Assistant Secretary of the Treasury, and Marcus Molinaro as Federal Transit Administrator.

The confirmation of Atkins could greatly shift the direction of the SEC, particularly in its approach to cryptocurrency oversight. Former SEC Chair Gensler resigned on Jan. 20—the day of Donald Trump’s inauguration—and was notorious for his very strict “regulation by enforcement” approach to digital assets. This then also led to numerous lawsuits against major crypto firms. Since Commissioner Mark Uyeda took over as acting chair, the agency dropped several enforcement actions, including some against companies with executives who donated to Trump’s 2024 campaign, like Ripple Labs. Democrats raised concerns about transparency and accountability in the SEC under its current leadership. Some lawmakers requested that Uyeda preserve records related to the Trump administration’s potential connections to World Liberty Financial, which is a crypto venture tied to the president’s family. Additionally, Elon Musk’s “government efficiency” team reportedly now has access to SEC data and internal systems, which caused fears of a purge of civil servants and possible disruption to financial markets as regulatory priorities shift.