Johnson votes against central bank digital currency

In 2022, following the turmoil of COVID lockdown policies that struck a crippling blow to the global economy, a fleet of Canadian truckers took part in a grand protest against the government of Justin Trudeau’s vaccine mandates for their industry, occupying several blocks of the Canadian capital of Ottawa.

In retaliation to this, Trudeau’s government took unprecedented action – it froze the bank accounts of many of the protest’s leaders and even seized their vehicles. The BBC reported at the time that at least 76 accounts were frozen under the auspices of an emergency act, locking off over $3 million of funds and assets from the convoy. This was possible thanks in no small part to the existence of a central banking system that has wide-reaching authority over Canadian citizens’ bank accounts.

The move drew much condemnation and concern – and the memory of that action was invoked Thursday, as the U.S. House of Representatives passed a bill that would prohibit a central digital bank currency.

“The Chinese Communist Party uses a central bank digital currency to track the transactions of their citizens, and in Canada, the Trudeau Administration froze bank accounts of individuals involved in trucker protests,” said Dusty Johnson, South Dakota Congressman. “This type of surveillance and restriction is wholly un-American. I’m glad the CBDC Anti-Surveillance State Act passed the House to protect the financial privacy and liberty of our citizens.”

Central Control

President Joe Biden issued an executive order in 2022 that sought to lay the groundwork for a central banking system in the U.S. under the auspices of the Federal Reserve.

In that order, citing the “explosive” growth of digital assets, including cryptocurrencies, the administration announced an intent to provide regulation and oversight over these assets.

“The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk,” the White House stated. “The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate. And, it must play a leading role in international engagement and global governance of digital assets consistent with democratic values and U.S. global competitiveness.”

This executive order was the “first ever whole-of-government approach” to addressing the risks and harnessing the benefits of digital assets. This order would establish a central digital currency for the U.S.

Former President Donald Trump condemned the establishment of this digital currency, firmly placing the issue upon the partisan divide, pledging that upon re-election, he would never allow the creation of this centralized currency.

The executive order spurred some in Congress, and began the process that has culminated in the House’s passage of this prohibition.

The bill’s passage was narrow – and almost entirely on party lines. No Republican voted against the bill, while almost every Democrat did. There were four abstentions, and a similar bill, sponsored by Texas’ Ted Cruz, will face its own battle in the Senate.

Johnson’s Stand

Rep. Johnson announced his support for the anti-surveillance measure in a press release, which described the CBDC as a digital sovereign currency that is issued, monitored and managed by a central bank.

“In short, a CBDC is government-controlled programmable money that, if designed without the privacy protections of cash, could give the federal government unilateral authority to surveil Americans’ transactions and restrict politically unpopular activity,” Johnson stated. “The White House issued Executive Order #14067 urging for CBDC research and development. The corresponding report made it clear that the Biden Administration is not only wanting to create a CBDC, but they are willing to trade Americans’ right to financial privacy for a surveillance-style CBDC.”

In the release, Johnson said the CBDC Anti-Surveillance State Act:

• Prohibits the Federal Reserve from issuing a CBDC directly to anyone, ensuring the Fed can’t mobilize itself into a retail bank.
• Prohibits the Federal Reserve from issuing a CBDC indirectly to individuals through financial institutions or other third parties.
• Prohibits the Federal Reserve from using a CBDC as a tool to implement monetary policy and control the economy.
• Requires authorizing legislation from Congress for the issuance of any CBDC.
• Protects innovation that reflects American values.

The bill’s sponsor is Tom Emmer, Majority Whip from Minnesota, who issued his own statement about the bill.

“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 stated. “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. We are proud to have led this effort and thank my colleagues for their support.”

On the House Floor, Emmer described trusting in the good will of government control over centralized currency to be ‘naive’.

“It is naïve to believe that your government won’t weaponize the tools it has to control you,” Emmer said. “So, it shouldn’t come as any surprise that the appetite for financial surveillance can be an attractive proposition right here at home.”

It remains to be seen whether the Senate, which holds a Democrat majority, will pass a similar measure. With elections looming, this promises to be an ongoing story.