HR1919-119

What This Bill Does

The House-engrossed Anti-CBDC Surveillance State Act adds prohibitions to the Federal Reserve Act. Federal reserve banks could not offer financial products or services directly to individuals, maintain accounts for individuals, issue a central bank digital currency (CBDC) or substantially similar renamed digital asset, or offer one indirectly to an individual through a financial institution or other intermediary. The Board of Governors could not test, study, develop, create or implement a CBDC or substantially similar asset. The Board and Federal Open Market Committee could not use one to implement monetary policy. The bill has no stated sunset, grant program or appropriation.

Its CBDC definition requires digital money or monetary value denominated in the national unit of account, a direct Federal Reserve System liability, and wide availability to the general public. It therefore does not equate every private digital asset, bank deposit or electronic payment with a CBDC. The separate direct-financial-services and individual-account restrictions are broader than issuance alone. The substantially-similar-asset language prevents evasion merely by renaming a covered instrument but leaves application to particular designs dependent on their characteristics.

Who Benefits and How

People concerned about government access to retail payment information may benefit from foreclosing the covered Federal Reserve retail-currency architecture; this is an intended privacy protection, not evidence that all CBDC designs necessarily involve surveillance or that current government surveillance is ended. Private retail banks and payment-service providers could avoid a potential directly competing Federal Reserve retail service, although the bill does not guarantee their profits or exempt them from financial regulation. Providers and users of dollar-denominated currency that is open, permissionless, private and fully preserves physical-cash privacy gain an express construction rule protecting that qualifying currency from specified prohibitions. The bill does not declare that any particular stablecoin or cryptocurrency meets all these conditions.

The House narrows the introduced direct-products-and-services prohibition by adding financial. That change preserves room for nonfinancial services to individuals under this particular provision; it does not create a new affirmative authority or remove the separate individual-account prohibition.

Who Bears the Burden and How

Federal reserve banks lose the prohibited retail-service, account and currency options; the Board of Governors loses the specified CBDC research, development and implementation options; and the Federal Open Market Committee faces a statutory limit on monetary-policy tools. Individuals who would prefer a Federal Reserve retail account or broadly available direct central-bank digital claim would not have that option through these covered channels. Financial institutions and other intermediaries could not serve as a route for reserve banks to evade the retail CBDC restriction, which can limit a potential new line of business even while private providers avoid direct competition. No penalty schedule, reimbursement or private right of action is created here.

The privacy-preserving-currency exception is carefully cross-referenced: it limits construction of the Board research/development prohibition and the direct and indirect issuance prohibitions. It does not cite the monetary-policy prohibition or the direct financial-service and account prohibitions, so it cannot be treated as an exception to every restriction. It also does not repeal securities, banking, anti-money-laundering or other laws governing private currency. Section 5 is a nonbinding sense of Congress about the need for congressional authorization, not a judicial finding that resolves every question about existing Federal Reserve authority. This summary describes the House proposal rather than asserting enactment.

Key Provisions

• Section 2 prohibits Federal reserve banks from direct financial products or services for individuals, individual accounts and CBDC issuance, including substantially similar assets under another label.
• Section 3 prohibits indirect offers of a CBDC or substantially similar asset to individuals through financial institutions or other intermediaries; the restriction is directed at Federal reserve banks.
• Section 4 prohibits the Board from testing, studying, developing, creating or implementing the covered currency and prohibits the Board and Federal Open Market Committee from using it for monetary policy.
• Section 4 defines CBDC using three cumulative elements: national-unit denomination, direct Federal Reserve liability and broad public availability. It does not automatically classify every wholesale reserve balance or private payment token as a CBDC.
• Section 4 protects qualifying open, permissionless, private, cash-privacy-preserving dollar currency from only the specifically cited research and issuance prohibitions, leaving the separate monetary-policy, direct-service and account restrictions uncited.
• The House modifies Section 2 by adding financial to the introduced products-or-services ban, retains the remaining operative provisions and expresses Congress's nonbinding position that new CBDC issuance authority requires congressional action.