H.R.1430 - No Central Bank Digital Currency Act; No CBDC Act (119th Congress)
Summary
H.R.1430, also known as the "No Central Bank Digital Currency Act" or the "No CBDC Act," aims to amend the Federal Reserve Act. The bill seeks to limit the ability of Federal Reserve banks to issue central bank digital currency (CBDC) directly to individuals. It also restricts Federal Reserve banks from holding digital currencies issued by the United States government as assets.
Expected Effects
If enacted, this bill would prevent the Federal Reserve from issuing a CBDC directly to individuals. This would maintain the current financial system's structure, where individuals primarily interact with digital currency through intermediaries like commercial banks. It would also restrict the Fed's ability to incorporate government-issued digital currencies into its balance sheet.
Potential Benefits
- Protection of Privacy: Prevents the government from having direct access to individual financial transactions through a CBDC.
- Preservation of the Existing Banking System: Maintains the role of commercial banks as intermediaries in the financial system.
- Limiting Government Control: Restricts the government's ability to directly control or manipulate the money supply through a CBDC.
- Financial Stability: Reduces the risk of destabilizing the existing financial system by preventing the Fed from directly competing with commercial banks.
- Prevents potential for mass surveillance: Limits the potential for the government to track and monitor citizens' financial activities.
Most Benefited Areas:
Potential Disadvantages
- Missed Opportunity for Innovation: Could hinder the development of potentially more efficient and inclusive payment systems.
- Reduced Competitiveness: May put the US at a disadvantage compared to other countries that are exploring or implementing CBDCs.
- Limited Financial Inclusion: Could prevent the expansion of financial services to underserved populations who may benefit from a CBDC.
- Slower Technological Advancement: May stifle innovation in the financial technology sector by limiting the role of the Federal Reserve.
- Reduced Monetary Policy Flexibility: Limits the Federal Reserve's ability to implement monetary policy through a CBDC.
Constitutional Alignment
The bill's alignment with the Constitution is complex. Congress has the power to coin money and regulate its value (Article I, Section 8). The bill does not directly challenge this power but rather limits the Federal Reserve's ability to issue a specific form of digital currency. The bill could be seen as an exercise of congressional oversight over the Federal Reserve, which was created by Congress. The 10th Amendment reserves powers not delegated to the federal government to the states or the people, and this bill could be argued to protect individual financial autonomy.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).