House member urges Congress to ‘criminalize’ CBDCs: ‘Tool for coercion and control’

A U.S. representative has called for Congress to ban and “criminalize” central bank digital currencies (CBDCs), condemning them as a “tool for coercion and control.”

“The Federal Reserve is building the financial equivalent of the Death Star,” tweeted Rep. Warren Davidson (R-OH) on Sunday while posting a screenshot of an advertised “Sr. Crypto Architect” position to design CBDC technology with the Federal Reserve Bank of San Francisco.

“Central Bank Digital Currency (CBDC) corrupts money into a tool for coercion & control,” Davidson continued, adding, “Congress must swiftly ban then criminalize any effort to design, build, develop, test or establish a #CBDC.”

The congressman went on to quote from the job description, which suggested that the Federal Reserve’s Board of Governors, which oversees all twelve Federal Reserve banks in the U.S. and helps carry out U.S. monetary policy, may require the implementation of a CBDC.

“You will engage directly with management… and vendors to ensure the Federal Reserve is well-positioned to design, develop, and implement technology to support a CBDC as may be required by the Board of Governors,” reads the job listing posted to Indeed.

One Twitter user objected that “supporting a ban of CBDC’s is simply a lack of understanding of what they are and what they are supposed to be,” suggesting that ensuring “privacy” and other “consumer protection[s]” are enough to make CBDCs acceptable.

Davidson argued in response that “money should not be programmable by a central authority,” and should not require “permission” for peer-to-peer transactions.

Eswar Prasad, senior professor of trade policy at Cornell University, recently admitted during a World Economic Forum (WEF) summer meeting that CBDCs can be used by governments to control purchases, and confessed that he sees such power as a positive development.

“You could have, as I argue in my book, a potentially better — some might see it as a darker world — where the government decides that units of central bank money can be used to purchase some things but not other things that it deems less desirable, like say ammunition or drugs or pornography or something of the sort,” Prasad said. “And that is very powerful in terms of the use of a CBDC.”

The U.S. government has already declared it is pulling out all the stops to develop and issue a CBDC. Executive Order 14067, issued March 9, 2022, declared that the Biden administration “places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC,” and called for an analysis of its “potential implications.”

While White House announcements do not indicate when such a CBDC would be developed and implemented, financial adviser Joe Brown is warning that the infrastructure for a U.S. CBDC is already being quietly developed in the form of a digital instant payments service called FedNow.

On March 15, the Federal Reserve announced that FedNow would launch in July 2023. FedNow allows “24/7 settlement… that happens instantly from bank to bank.”

“This infrastructure bypasses a lot of the need for the current banking infrastructure, which is the purpose of a central bank digital currency,” Brown explained on his video blog, arguing that FedNow paves the way for a CBDC by having everyone “open an account directly with the Federal Reserve, the central bank…”

“This transforms the purpose of the entire banking system really into infrastructure for the CBDC,” continued Brown, noting that it would “centralize everything under one roof.”

“And once that system is built, once all the kinks are worked out of the system… then they will have the foundation in place to build the Gen 2, the Version 2 CBDC on top of it. The only thing that would be left to do would be to have everybody open an account directly with the Fed.”

Congressional efforts to ban a CBDC have been recently launched by U.S. House Majority Whip Tom Emmer (R-MN) and Sen. Ted Cruz.

In February, Emmer introduced the CBDC Anti-Surveillance State Act, co-sponsored by Davidson and other Republicans, to “halt efforts” of D.C. officials to issue a CBDC that “strips Americans of their right to financial privacy.”

The majority whip warned on March 9 at the Cato Institute, a D.C.-based libertarian think tank, that the idea of a CBDC as “government-controlled programmable money” that can be  “easily weaponized into a surveillance tool” is gaining traction within sectors of power in the country.

Commenting on the legislation proposed by Emmer, Rep. French Hill (AR-R) pointed out that the federal government does not have the authority to issue a CBDC “without explicit Congressional approval.”

Cruz emphasized this point in legislation he introduced in March to ban a CBDC, similar to Emmer’s.

However, U.S. Federal Reserve Chairman Jerome Powell has suggested there could be an attempt to circumvent such congressional authorization, stating that “ideally” a law would be passed to authorize a CBDC “rather than us trying to interpret our law to enable this.”

Florida Governor Ron DeSantis has publicly corrected Powell’s statement, pointing out that congressional approval is not just “ideal,” but necessary.

DeSantis has pledged to ban CBDCs if elected president.