Privacy Fears Clash With Global CBDC Momentum in U.S. Congress

Congressional debate on central bank digital currency (CBDC) policy resumed as U.S. lawmakers returned from their August recess, highlighting growing political tensions and diverging views on the future of a digital dollar. The Anti-CBDC Surveillance State Act, passed by the House in July, reflects a strong opposition to the development of a CBDC due to concerns over privacy and government surveillance [1]. Representative Tom Emmer, the bill’s sponsor, emphasized the risks of programmable money controlled by the federal government, warning of potential threats to civil liberties [1]. However, experts caution that such framing may oversimplify the issue, as the Federal Reserve has indicated it would not launch a CBDC without clear congressional authorization and could incorporate privacy safeguards into its design [1].

The U.S. stance on CBDCs contrasts with that of other major economies, including China, which has already deployed its digital yuan, and the European Union, which is currently testing its digital euro. Sheila Warren of the Project Liberty Institute noted a significant divergence in U.S. policy from global trends and emphasized the distinction between wholesale and retail CBDCs [1]. While the former is seen as a logical extension of current financial systems, the latter is considered less likely to be implemented in the U.S. Warren also pointed to the growing role of stablecoins as a potential alternative to a CBDC, noting their potential to become the "jet fuel" of the digital economy [1].

Alongside the CBDC debate, a broader push for regulatory clarity in the digital asset market gained momentum. On July 17, the House passed the CLARITY Act, a key piece of legislation aimed at clarifying the regulatory framework for digital assets [4]. This bill seeks to resolve the long-standing jurisdictional dispute between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) by assigning primary responsibility for regulating digital assets to the CFTC [2]. The bill was passed with a bipartisan vote of 294–134, and it is now under consideration in the Senate. The CLARITY Act also includes provisions to protect blockchain developers and non-custodial service providers from being forced into unworkable regulatory categories [2].

A parallel effort by the Senate Banking Committee, led by Senator Tim Scott, is seeking to build on the CLARITY Act with its own discussion draft of the Responsible Financial Innovation Act [3]. This proposed legislation aims to further clarify the classification of digital assets and ensure that regulations are tailored to the unique technological characteristics of the industry [3]. The bill also includes provisions to define an "ancillary asset" to help distinguish between digital assets that are and are not securities. These efforts highlight a growing consensus among lawmakers that the U.S. must establish clear and consistent rules to foster innovation and attract digital asset talent and capital [3].

Despite these legislative developments, challenges remain, particularly regarding the implementation of a CBDC. While the House passed the Anti-CBDC Surveillance State Act, it received minimal support from Democrats, with only two of 212 voting in favor [1]. This suggests that the CBDC debate remains deeply partisan, with significant differences in how lawmakers view the risks and benefits of a digital dollar. Meanwhile, the European Central Bank (ECB) has continued to advocate for a digital euro, emphasizing its role as a backup in times of crisis [5]. ECB board member Piero Cipollone argued that a digital euro would ensure universal access to a secure digital means of payment during disruptions, but some EU lawmakers remain skeptical of its potential impact on privacy and commercial banking [5].

The U.S. digital asset policy landscape is evolving rapidly, with both the House and Senate working to shape a regulatory framework that balances innovation with consumer protection and national security concerns. The CLARITY Act, alongside efforts to pass the Responsible Financial Innovation Act in the Senate, signals a growing recognition of the need for clear rules in the digital asset space [2]. While the future of a U.S. CBDC remains uncertain, the broader focus on stablecoins and regulatory clarity suggests that policymakers are prioritizing practical solutions over ideological opposition [1]. The outcome of these legislative efforts will likely have significant implications for the future of digital finance in the U.S. and its position in the global digital economy.

Source:

[1] Cointelegraph - CBDC debate continues in the U.S. as Congress returns from recess (https://cointelegraph.com/news/cbdc-debate-continues-in-the-u-s-as-congress-returns-from-recess)

[2] Coingeek - US Congress urged to protect developers in market structure bill (https://coingeek.com/us-congress-urged-to-protect-developers-in-market-structure-bill/)

[3] Brave New Coin - Senator Lummis says U.S. crypto market structure bill will be law by 2026 (https://bravenewcoin.com/insights/senator-lummis-says-u-s-crypto-market-structure-bill-will-be-law-by-2026)

[4] Akin Gump - CryptoLink Newsletter - July 2025 Updates (https://www.akingump.com/en/insights/newsletters/cryptolink-july-2025-updates)

[5] Cointelegraph - EU lawmakers skeptical of digital euro as ECB renews pitch (https://cointelegraph.com/news/digital-euro-ecb-lawmakers-privacy-risks)