Cong. Auchincloss Fights Digital Currency Plan

They are an unlikely team – one from blue Massachusetts and the others from red Arkansas. But their discomfort with repeated hints from the Biden Administration regarding a shift to a US digital dollar – continually managed, monitored, and controlled by the Federal Government -- was a step too far for both men.

So, remarkably, they teamed up to create legislation to try to block the process.

Rep. French Hill (AR-02), Vice-Chairman of the House Financial Services Committee and Chairman of the Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion, introduced the Power of the Mint Act alongside Rep. Jake Auchincloss (MA-04) in late May. It was a consequential step that got relatively little notice outside of the halls of Congress. This bipartisan legislation [H.R. 3402] would prohibit the Federal Reserve from issuing a central bank digital currency (CBDC).

A transcript of their respective remarks follows:

Congressman Jake Auchincloss, representing Franklin in the Mass. Fourth Congressional District

“Recently the United States has considered issuing a central bank digital currency –CBDC -- a digital liability issued by a central bank and made available to the public. The implications for the United States dollar as the world's reserve currency and for domestic fiscal and monetary policy of the US of a CBDC are hotly debated by experts.

“What should not be controversial, however, is that the Federal Reserve, Treasury and all other executive agencies cannot issue a CBDC without explicit authorization from Congress. Article One, Section Eight of the Constitution grants that power to “coin money and to regulate the value thereof” exclusively to Congress. Under Section 16 of the Federal Reserve Act, the Fed can issue “Federal Reserve Notes,” but CBDCs are not Federal Reserve notes. The law restricts Federal Reserve notes to paper notes printed on plates and dyes engraved by the Treasury Department according to a detailed process that clearly does not apply to digital money.

“The Federal Reserve has consistently recognized that it lacks authority to issue a CBDC without Congressional authorization. The Fed published a report on CBDCs in January 2022, and said it would not issue a CBDC without “clear support from Congress,” in the form of a specific authorizing law. Fed Chair Powell has personally affirmed that view on multiple occasions since the report was published. For example, last September, he said during a panel discussion on digital finance that the Fed will need approval from both the Executive Branch and Congress to move ahead with a central bank digital currency. Although the Fed understand that it cannot issue a CBDC without authorization from Congress, some commentators continues to suggest that legislation may not be necessary. They are wrong.

“The framers of the Constitution understood the importance of a strong and stable national currency, which is why they granted Congress the exclusive power to coin money and regulate its value. Congress must not forfeit this power, which is why I am introducing The Power to Mint Act. This bill clearly prohibits the Federal Reserve and the Treasury Department from issuing a CBDC without authorization from Congress. I thank my friend, Representative French Hill, who is the chairman of the Subcommittee on digital assets, financial technology and inclusion on the Financial Services Committee for his work with me on this bill. And I recognize Mr. Hill for two minutes.”

Rep. French Hill (AR-02), Vice-Chairman of the House Financial Services Committee and Chairman of the Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion

"Mr. Speaker,

"I rise today in support of the Power of the Mint Act.

"I first want to thank the bill’s sponsor, Mr. Auchincloss from Massachusetts, for his partnership to introduce the first bipartisan bill in Congress to prohibit the Federal Reserve from issuing a central bank digital currency (CBDC).

"We believe that under the Constitution, that authority rests with Congress and the American people, not unelected bureaucrats. And that’s non-partisan.

"Something that sets Americans apart from others is we’re rebelliously independent and skeptical of government overreach.

"It’s a cultural tradition in this country that’s been passed down from our Founding Fathers.

"Usually, the only time my constituents from central Arkansas ever call into my office about digital assets is when they’re worried that Uncle Sam is going to use a central bank digital currency to surveil where they’re spending their money and how much, and ultimately block them from using the banking and payments system.

"And it makes sense when you see conservative voices being silenced in the media and elsewhere. That’s why it’s critical we think about what guardrails, if any, are needed to protect consumers from government overreach, and prevent a central bank digital currency from being weaponized to target politically disfavored industries or activities.

Americans have a right to financial privacy. That’s why I’m proud to stand with the gentleman from Massachusetts to protect civil liberties, the role of the dollar as the global reserve currency, and prevent a surveillance state over everyday Americans.

"I urge my colleagues to support this bipartisan legislation, and I yield back."

[Editor’s Note: It does not appear that any further action on H.R. 3402 has occurred as of July 22, 2023]