The US House of Representatives has voted to prevent the Federal Reserve from issuing a CBDC (central bank digital currency).
The CBDC Anti-Surveillance State Act, introduced by Majority Whip Tom Emmer sought to block the US central bank from continuing efforts toward the development of a digital dollar, expressing concerns that a US CBDC could be used to control Americans.
Democrats said during the debate that the concerns were overblown and a ban would block public sector innovation and research. Overall, 213 Republicans and three Democrats voted for the bill, while 192 Democrats voted against it.
Crypto ETF
However, in a similar vote the House passed a bill that aims to create a new legal framework for digital currencies, despite an unusual warning from the US securities regulator it could create new financial risks.
The Republican-sponsored Financial Innovation and Technology for the 21st Century Act passed in a bipartisan 279-136 vote. It is not clear if the Senate will take up the measure.
The bill’s supporters in the Congress argue that the bill will provide regulatory clarity and help promote the industry’s growth.
The House approval comes as the US Securities and Exchange Commission (SEC) signalled that it will likely approve applications for spot Ether exchange-trade funds in a surprising boost to the industry.
But SEC Chair Gary Gensler said in a statement that the bill “would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.”
The bill was backed by crypto supporters and industry organizations who have long viewed Gensler’s SEC as an impediment to the wider adoption of digital assets.
“The House passage of FIT21 represents a watershed moment and badge of Congressional validation for the crypto industry in the United States,” comments Kristin Smith, who heads up the Blockchain Association, an industry lobby group.
However, both the market structure and the anti-CBDC bills seem headed toward similar fates in the Senate – going nowhere – given that half of congress does not have a counterpart for either piece of legislation.
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