What Is the U.S. Anti-CBDC Bill, and Why Is It So Important?

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In late May 2024, the U.S. House of Representatives passed an anti-central bank digital currency (CBDC) bill that looks to block the creation of government-controlled CBDC in the United States.

Approval from the lower chamber of the U.S. Congress represents a major victory for the crypto industry, given its growing influence on U.S. politics and the upcoming November 2024 U.S. presidential election.

In this article, we explain what the anti-CBDC bill is all about and whether it stands any chance of being approved by the U.S. Senate.

Key Takeaways

  • The House of Representatives passed the anti-CBDC bill as lawmakers voted 216 to 192.
  • Experts fear the creation of a centralized surveillance system.
  • The anti-CBDC bill will be introduced in the U.S. Senate next.
  • In 2022, the U.S. Federal Reserve expressed concern over the U.S. Dollar losing its dominance to “more attractive” CBDCs.
  • China is leading CBDC innovation, having piloted the e-CNY program as early as 2019.

What Is the Anti-CBDC Bill?

The CBDC Anti-Surveillance State Act, or H.R. 5403, is a bill that will amend the Federal Reserve Act to prohibit the U.S. Federal Reserve from issuing CBDCs.

The proposed bill was first introduced in September 2023 and is sponsored by a United States senator from Texas and Republican party member Ted Cruz.

The bill aims to protect the right to financial privacy and prevent the U.S. government from “weaponizing their financial system against their own citizens.”


The U.S. representative Patrick McHenry said on the U.S. House of Representatives floor on May 23, 2024:

“For example, the Chinese Communist Party uses a CBDC to track spending habits of its citizens. This data is being used to create a social credit system that rewards or punishes people based on their behavior. That type of financial surveillance has no place in the United States.”

Here are the three points that the proposed bill looks to amend the Federal Reserve Act by:

  1. A Federal Reserve Bank shall not offer products or services directly to an individual.
  2. A Federal Reserve Bank shall not maintain an account on behalf of an individual.
  3. A Federal Reserve Bank shall not issue a central bank digital currency or any digital asset that is substantially similar under any other name or label directly to an individual.

Why Is the Anti-CBDC Bill Proposed? The Risks of CBDCs

A CBDC is a digital form of money issued by a central bank. While most of us use digital money held in our bank accounts every day, they should not be mistaken for CBDCs. A CBDC is a liability of the issuing central bank and not of a commercial bank.

CBDCs inherit advantages that make cryptocurrencies attractive. These advantages include easy transferability, low fees, seamless cross-border payments, and wider financial inclusion.

However, the privacy risks arising from a centralized operator having absolute control and access to a national payment system have sparked concerns over how governments will be able to control, censor, and monitor citizens’ financial activities.

Experts fear the creation of a centralized surveillance system.

Representative McHenry raised these concerns, saying, “If not open, permissionless, and private, a CBDC is no more than a CCP-style [Chinese Communist Party] surveillance tool waiting to be weaponized.”

Meanwhile, Representative Dusty Johnson cited how the Canadian government, under Prime Minister Justin Trudeau, froze the bank accounts of individuals involved in trucker protests in 2022 as one of his reasons for voting for the passing of the anti-CBDC bill.

According to the American libertarian think tank Cato Institute, CBDCs are the “single largest assault to financial privacy since the creation of the Bank Secrecy Act and the establishment of the third-party doctrine.”

CBDC could allow governments to freeze or seize assets, impose negative interest rates to spur spending, and prohibit purchases of certain goods (e.g., alcohol, cigarettes, etc.), said the Cato Institute.

These are the key reasons why the CBDC Anti-Surveillance State Act is being proposed in the U.S.

How Has the U.S. Congress Reacted to the Anti-CBDC Bill?

On May 23, 2024, the House of Representatives passed the anti-CBDC bill as lawmakers voted 216 to 192.

213 Republicans voted in favor of the bill, while only three Democrats voted for the bill, showcasing a clear divide between the two parties regarding their stance towards the crypto industry.

Republicans have shown an inclination to embrace the crypto industry ahead of the November 2024 U.S. Presidential election. Former U.S. President Donald Trump has pledged his support for the industry and has started accepting campaign donations in crypto.

The anti-CBDC bill was the second crypto bill to pass the House of Representatives in the second-last week of May 2024. Earlier during the week, the House approved the FIT21 bill, marking the first time a crypto bill cleared one of the Houses of the U.S. Congress.

Unlike the anti-CBDC bill, the FIT21 bill, which aims to provide regulatory clarity to the crypto industry, won strong bipartisan support and recorded a 279-to-136 vote that saw 71 Democratic representatives supporting the bill.

What Is Next for the Anti-CBDC Bill?

The anti-CBDC bill and the FIT21 will be introduced in the U.S. Senate next. As we saw in the lower chamber vote, the anti-CBDC bill will face tougher resistance than the FIT21 given the sensitive nature of the bill.

In a January 2022 report, the U.S. Federal Reserve said that a potential benefit of a U.S.-issued CBDC could be to preserve the dominant international role of the U.S. dollar.

The Federal Reserve showcased concern in the report by saying:

“Some have suggested that, if these new CBDCs were more attractive than existing forms of the U.S. dollar, global use of the dollar could decrease — and a U.S. CBDC might help preserve the international role of the dollar.”

China currently leads innovation in CBDC infrastructure, with the e-CNY program being piloted as early as 2019. According to the Atlantic Council, e-CNY circulation stood at RMB 13.61 billion ($1.878 billion) and was implemented across 25 cities at the end of 2022.

On May 17, 2024, the People’s Bank of China (PBoC) and the Hong Kong Monetary Authority (HKMA) announced that they would expand the e-CNY pilot program in Hong Kong, marking the first time the CBDC program is being implemented outside Mainland China.

In an email note, Galaxy Research noted the “starkly different approaches” of the U.S. and China to CBDCs. The experts said:

“Assuming the U.S. and China continue to pursue divergent policies when it comes to the use of CBDCs and other digital currencies, it appears likely that China will lead innovation in CBDC infrastructure while the U.S. leads adoption for privately-issued, dollar-denominated stablecoins.”

“Without exporting a CBDC network of their own, the U.S. may have to assert the central role of the U.S. dollar in global finance and compete in a new digital era through privately-owned, U.S.-based stablecoin issuers, which does have the advantage of protecting Americans’ right to financial privacy but the disadvantages of capital inefficiency,” added Galaxy Research.

The Bottom Line

The anti-CBDC bill is an incredibly important and sensitive bill that will continue to grab headlines for the rest of 2024.

The U.S. lawmakers will have to make a crucial decision on whether the U.S. can afford to lose the CBDC innovation race to China in the name of democracy.


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Mensholong Lepcha
Crypto & Blockchain Writer
Mensholong Lepcha
Crypto & Blockchain Writer

Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to Capital.com, StockTwits, XBO, and other publications. He started his writing career at Reuters in 2017, covering global equity markets. In his free time, Mensholong loves watching football, finding new music, and buying BTC and ETH for his crypto portfolio.