Federal Reserve Declares CBDC a ‘Key Duty’ to Congress

The Federal Reserve may be dead set on implementing a central bank digital currency (CBDC)—or at least continuing to study them—despite its public claims to the contrary, a new document suggests.

On Wednesday, GOP Majority Whip Tom Emmer (R-MN) publicly shared a file that he says he received from central bank staff earlier that day during a presentation to Congress.

The document, which appears to set out the “Key Duties” of the Fed like issuing currency and operating as the government’s fiscal agent, included “Central Bank Digital Currency” on the list.

If you don’t think the Fed is pursuing a CBDC, think again.

The Fed gave this to my staff during a presentation earlier this Congress. They view a CBDC as one of their KEY DUTIES. pic.twitter.com/0LcdWBKk58

— Tom Emmer (@GOPMajorityWhip) March 14, 2024

“If you don’t think the Fed is pursuing a CBDC, think again,” Emmer wrote on Twitter.

A CBDC is a central bank-issued fiat currency but in digital form. It is pegged 1:1 and redeemable with the nation’s prevailing currency, in this case, the U.S. dollar.

CBDCs have been touted by Fed vice chair Lael Brainard as a tool for reinforcing global dollar dominance, and “safe central bank liability in the digital financial ecosystem.”

By contrast, Emmer is one of the loudest voices in Congress to oppose a U.S. CBDC, repeatedly introducing legislation to ban their issuance entirely. Like many of his party members, including Sen. Ted Cruz (R-TX) and Florida Governor Ron DeSantis, he argues that CBDCs are China-style tools of financial surveillance and control.

According to the central bank, the Eastern superpower is one of the earliest pioneers of CBDCs through its digital yuan (e-CNY), which processed 10.16 trillion yuan ($1.36 trillion) in cross-border remittances between January and September of last year.

Neighboring Hong Kong announced on Thursday that it has kicked off stage 2 of its digital currency pilot, which will expand from testing its use in retail payments to experimenting with “programmability, tokenization, and atomic settlement.”

The U.S., by contrast, is still in the research phase for CBDCs and hasn’t officially decided whether it wants to issue or even test one.

Speaking to the Senate Banking Committee earlier this month, Fed Chair Jerome Powell confirmed that the central bank would only issue a CBDC with congressional approval and that maintaining user privacy would be a top priority.

“We’re nowhere near recommending—or let alone adopting—a central bank digital currency in any form,” he said at the time. “People don’t need to worry about it.”

Edited by Ryan Ozawa.

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