House votes to block Federal Reserve from creating own digital currency

The bill was led by GOP Rep. Tom Emmer

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White House is against crypto because it creates decentralization: Rep. Tom Emmer

Rep. Tom Emmer, R-Minn., discusses new legislation to protect Americans' digital currency privacy on 'Making Money.'

The House of Representatives voted along bipartisan lines Thursday to advance legislation blocking the Federal Reserve from creating its own central bank digital currency (CBDC).

Three Democrats joined all Republicans in voting for the bill – moderate Reps. Jared Golden, D-Maine., Mary Peltola, D-Alaska, and Marie Gluesenkamp Perez, D-Wash.

The CBDC Anti-Surveillance State Act was led by House Majority Whip Tom Emmer, R-Minn., and backed by Republican members of the House Financial Services Committee.

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House Majority Whip Tom Emmer led a bill to block the Fed from being able to issue a central bank digital currency. (Getty Images / Getty Images)

If it passed in both chambers of Congress, the bill would be a significant step toward curbing the federal government's ability to regulate cryptocurrency, but it's not clear if the bill would be taken up in the Democrat-controlled Senate.

"For more than two years, we have worked to educate, grow support, and pass this important legislation, which prevents unelected bureaucrats from issuing a financial surveillance tool to fundamentally undermine our American values," Emmer told Fox News Digital.

"My legislation ensures that the United States' digital currency policy remains in the hands of the American people so that any development of digital money reflects our values of privacy, individual sovereignty, and free market competitiveness. This is what the future global digital economy needs."

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Rep. Marie Gluesenkamp Perez was one of three moderate Democrats who voted for the bill. (Getty Images / Getty Images)

Fed Chair Jerome Powell said the financial regulatory body was "nowhere near" a place to create a central bank digital currency in remarks to Congress last March.

"If we were to ever do something like this, and we’re a very long way from even thinking about it, we would do this through the banking system, the last thing...the Federal Reserve would want would be to have individual accounts for all Americans," Powell said.

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Federal Reserve Board Chairman Jerome Powell downplayed the chances of the Fed creating a digital currency earlier this year,. (Samuel Corum/Getty Images / Getty Images)

Rep. Maxine Waters, D-Calif., the top Democrat on the House Financial Services Committee, argued Emmer's bill would "halt digital asset innovation for government uses" earlier this week when lawmakers were debating advancing the legislation.

"By prohibiting all CBDCs, the bill threatens the very primacy of the U.S. dollar and the power that affords our nation. Today, the U.S. dollar is the global reserve currency, with more than half of all international trade done in dollars. But the world is looking at how to speed up transactions and reduce costs, including by issuing their own central bank digital currencies," she said. "Currently, 13 nations are racing forward with CBDC development, including our G-7 peers, which are in far more advanced stages of CBDC development than the U.S. In fact, if this bill becomes law, we would be the only country in the world to ban a CBDC."