[Congressional Record Volume 171, Number 110 (Thursday, June 26, 2025)]
[House]
[Pages H3003-H3006]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CENTRAL BANK DIGITAL CURRENCY
(Under the Speaker's announced policy of January 3, 2025, Mr.
Davidson of Ohio was recognized for 30 minutes.)
General Leave
Mr. DAVIDSON. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and include extraneous material on the topic of this Special Order.
The SPEAKER pro tempore (Mr. Harrigan). Is there objection to the
request of the gentleman from Ohio?
There was no objection.
Mr. DAVIDSON. Mr. Speaker, I am here today to talk about central bank
digital currencies.
A lot of people don't necessarily know what a central bank digital
currency is, so we will start with a definition. A central bank digital
currency begins with the central bank. The central bank in the United
States is the Federal Reserve. The Federal Reserve manages our
currency. They also manage settlement between banks, so when banks have
to pay each other, they do it directly, but a lot of times they manage
it through the central bank.
Central banks around the world, whether in the United States or the
European Union, China's central bank, most countries have a central
bank. Switzerland has the Bank for International Settlements. Their
central bank is essentially the central banker to the central banks, so
when central banks pay each other, they broker the transaction through
the Bank for International Settlements.
What is the digital currency? Digital is sort of self-explanatory.
Currency is a means of payment. Traditionally, you think of money, the
system of money is as old as people. The right to transact predates any
government. People would transact with one another before we had a
government. It is an inherent natural right. As our Founders
recognized, we are endowed by our creator with certain inalienable
rights, that among them are life, liberty, and the pursuit of
happiness.
One of the ways we pursue happiness is by transacting with each
other: We buy things, or we make money from selling things. In the
natural order, there is nobody between you and the person you want to
do business with. In cash, that is still the case. When you hand a $20
bill to somebody for sweeping your driveway or a $100 bill for
shoveling your driveway in the snow or things like that, that is
between you and maybe the high school kid who came and shoveled your
driveway. There is no third party to get in between you and the other
person.
When you think about a lot of other transactions, we have sort of
migrated to a digital payment system of sorts today that involves third
parties, like Visa or Mastercard. They dominate the payment system in
the United States. Banks are behind the credit cards, so they are in
the scene, too, but fundamentally when you transact with a credit card
people think, well, that is digital, and you are using a credit card
company.
What they do really is amazing. For a relatively small fee, they
guarantee that it really was you who made the transaction. If it was
fraudulent, they insure the transaction, they will make you whole on a
credit card if you didn't pay it. They establish the identity and say
this really is you, and you really do have the credit available. Then
they establish the person who you are buying from as a store and say
this is really a credible transaction, and they approve it or deny it.
What they do with an amazing frequency in volume of transactions is
incredible. That is a third party, and it is
[[Page H3004]]
a private party. They don't necessarily collect the data between you
and Walmart, what did you buy while you were at Walmart. They will be
able to say, hey, Walmart is a credible place, you really were there,
you really did spend $100 at Walmart. They don't necessarily know what
you bought there. They might be able to recover that at some point. If
they are forensically discovering what did you buy when you were at
Walmart, they might be able to work with Walmart to figure that out,
but Visa doesn't necessarily cover that. That is our current state of
payments.
In a central bank digital currency, they would be able to know with a
digital identity who you are because they have got a digital ID. When
you look at the state of privacy and the amount of data the government
has on you, they know who you are, they can have access to all kinds of
information. Even the private sector has a lot of information.
If you look at what is being done today to aggregate that data, it is
not formally being done to establish a digital ID in the United States,
but it is being done in lots of places around the world. In China, they
have done this digital identification. They have tied it with your
facial recognition features, your geolocation data, all your
transaction data that they can discern and everything else they can
find about you in a government database in China, and they build what
is known as a social credit score.
If you attend events with people who support the government, your
social credit score might go up. If you attend events and your
geolocation data is associated with people who have been critical of Xi
Jinping, your social credit score goes down. If it goes down enough,
you can't even travel in China.
They are linking this digital ID with the payment system, the digital
currency, and in that sense, they are kind of essential components to
the way that it works. The way that Visa or Mastercard establishes who
you are has its own system. Here in the central bank digital currency,
digital ID is a critical component to how it works. The last
information I had, in four provinces this is the payment system.
You think, well, China, I mean, they are a Communist government. They
have a very authoritarian leader in Xi Jinping. Surely, Western
civilization wouldn't be doing this.
{time} 1700
The reality is that 100-plus countries around the world are
developing a central bank digital currency. They are not developing
what you would think of in America with freedom and free markets. They
are developing essentially the same kind of central bank digital
currency that China is.
In fact, the Bank for International Settlements in Switzerland is
telling people how to do it. They are facilitating central banks--not
just random central banks, our central bank. They are not working
directly with the Federal Reserve entirely.
They are saying they are working with this independent private
entity, the Federal Reserve Bank of New York. This is a quasi-public-
private kind of dynamic in the U.S. central bank with the Federal
Reserve.
They are building it. Literally, multiple components of the Federal
Reserve are actively recruiting people to write code to develop a
central bank digital currency.
For ``Star Wars'' fans, this is a depiction of the Death Star. I
don't want to give away the plot, but the evil empire builds this Death
Star that is like a moon-sized place, and it can destroy entire planets
with one giant laser beam. Just boom and the planet is gone.
It is an amazing amount of power that the empire has built for
themselves in ``Star Wars,'' and, of course, it is fiction. The central
bank digital currency is kind of the equivalent. The central banks are
saying: Don't worry. We would need permission from the legislature
before we could establish a central bank digital currency. We are just
designing it.
In the movie, they didn't really get permission to turn it on. They
were just designing it. Then, they were just building it, and it wasn't
yet complete. Then, they were just testing it. Once you demonstrate the
capability, you have all the power.
The reality is that in the fall, I traveled with fellow Financial
Services Committee members to the Bank of England. I met with them, and
they are developing a central bank digital currency. They know that
their legislature would have to act to impose it on the citizens of the
United Kingdom. They know that it is not popular with their citizens.
Nevertheless, they are developing it, just designing it and testing it.
Then, we traveled to Brussels and met with the European Central Bank.
They, too, are designing, developing, and testing how a central bank
digital currency could work. They know that before they could impose
this on the European Union, they would need not just support from the
European Parliament but from the member states of the European Union.
Nevertheless, they are working to build it.
Then, we traveled to Basel, Switzerland, which is the base of
operations for the Bank for International Settlements. We met with
them. They, too, said that they are just studying this, not really
proposing that everyone do it.
The reality is that when you talk to everyone who is developing it,
who is helping coordinate it? The Bank for International Settlements.
Again, there is no country that we found anywhere that is developing a
system that protects privacy, that protects identity, and that protects
the transaction data. They are all doing it the same way China is, and
they are designing it to be interoperable around the world.
The reality is that a system of money is as old as civilization. Like
I said, the right to transact predates any government. The government
doesn't give you that right. Governments around the world have adopted
a very similar approach. In the United States, we have the Bank Secrecy
Act, anti-money laundering laws, and know your customer laws.
The United States, every Western democracy, and dictatorships around
the world have similar features for banking. If you spy on your
customers, you are allowed to operate a financial services business.
They don't state it that way. I mean, it is not that creepy inherently
in the United States. For the most part, you are supposed to get a
warrant. They don't always do that. They have been found to violate it
on occasion in the United States. In certain other governments, it is
very creepy.
As we were working to protect secrecy, the Canadian Government was
literally imposing a shutdown on bank accounts for Canadian truck
drivers who were protesting COVID policies in Canada. It wasn't that
they were stacking SWAT teams or special operators outside the door of
houses. The one ring to rule them all, the massive amount of power, was
your access to your own money. You can't even buy groceries. You can't
pay rent. You have no means of payment.
That is why it is essential that we protect the power to transact and
protect privacy so that it really has the same kind of characteristics
as cash.
As a citizen, without probable cause and due process, no one should
see your transaction data. Without being guilty of something, no one
should limit your ability to transact. That is the system of government
our countrymen have.
Around the world, they don't have the same protections, so why is our
government and our central bank working on the exact same plan? When
you look at dystopian fiction, whether it is ``Brave New World'' or
``Nineteen Eighty-Four,'' or what I and billions of people around the
world consider Scripture, the Book of Revelation, the money is always
corrupted.
It is taken from its proper use as a store of value and an efficient
means of transaction, and it is corrupted into a tool for surveillance,
coercion, and control. Unless you comply with the regime, whoever that
is, then you don't get the right to transact.
Everywhere it is depicted, whether it is fiction or Scripture, it is
evil, so we should rightly resist this future. It is dystopian.
``Nineteen Eighty-Four'' was meant to be fiction, not an instruction
manual. Unfortunately, you see people working to build this very future
around the world. That is what a central bank digital currency is.
Let me tell you what it is not. People often associate every kind of
digital money with central bank digital currency. Bitcoin may be the
most widely known form of crypto, certainly the
[[Page H3005]]
biggest share of the market value. If you look at the Bitcoin white
paper--you can look it up out there. In just the abstract, the whole
point is to preserve the characteristics of cash, permissionless peer-
to-peer transactions where there is no third party that goes through
it. This is why Bitcoin became popular.
The ability to do this depends on the architecture. There is no
corporate headquarters, no CEO. It is really math and computer
programming.
How does this work? They establish trust in a different way. They
assume they trust no one. The transactions are approved in blocks. With
blockchain, that is the way it is done. It is done very securely.
Governments around the world initially didn't like it. They wanted to
ban it. After a while, they decided that they couldn't really ban it,
so they were not going to be able to stop it. The checkdown position is
to just keep it account-based.
Account-based crypto is pretty harmless. It is about like banking. I
mean, cash isn't technically illegal. When you go to the bank and ask
for any significant amount of it, they always ask questions. That is
because of the Bank Secrecy Act, the anti-money laundering laws, the
know your customer laws. ``What are you going to do with all that
cash?'' ``It is my cash. Why can't I have it?''
Sometimes they will tell you. Sometimes they won't. I have to fill
out this report. ``Who gave you all that cash?'' In fact, if you
deposit more than $10,000, it creates a cash transaction report.
When that was first passed in the early 1970s, it was $10,000. Today,
that number adjusted for inflation is over $81,000. That is who they
were looking for. If you look at the last Presidential administration
under Joe Biden, they wanted to know about your bank account if you had
ever had $600 of transactions in your bank account, so they were going
the other way.
The reality is that they want to monitor every single transaction.
That is how they know whether you had a transaction over $10,000. They
look at everything. There is already a lot of surveillance in it. To
me, maybe too much.
The question is, what can you do with it? Once you create a central
bank digital currency, you have empowered the central bank to see every
side of every transaction.
In fact, the former director of the Commodity Futures Trading
Commission, Giancarlo, talked about digital dollars. He has gone around
for a long time talking about it and touts the features. They call it
programmable money.
If you wanted to put stimulus into the economy like we were doing
during COVID, you could put money in and say it expires. If you don't
spend it by this date, it is gone. You can say it can be used only for
these things.
When we did stimulus checks during COVID, a lot of people went out
and bought flat-screen TVs from China. That didn't exactly help the
U.S. economy. Proponents of programmable money were saying they could
make it so you could spend it only on these things and not those
things.
Climate change alarmists--climatologists, as I refer to them--could
program the money so that if you are driving a hybrid vehicle but still
need to buy gas from time to time to keep your hybrid internal
combustion engine running, you could pay $2 a gallon for gas. If you
are driving a pickup truck that is considered a gas guzzler, you could
pay $10 a gallon.
It is programmable money. You could design any feature in it you want
because the central government controls it.
{time} 1710
Mr. Speaker, the central government controls it.
That is why central bank digital currency is truly a threat to
Western civilization. It puts the government between us and our money.
In the United States, the pursuit of happiness has been defined as
protection for private property and property rights. There is no more
basic thing than the property right to a bank account and to the money
we earn. We have a right to the paycheck that gets deposited into a
bank account.
Mr. Speaker, if that is not really yours, if it is really
programmable money and if it is conditioned upon whatever the
government wants to condition it upon, is it really yours?
That is exactly the future that people want to create out of crypto.
If we look at the Bitcoin White Paper and many of the other use cases,
Crypto is designed to somewhat separate money from the State. This
future is pretty creepy.
It is quite literally Orwellian. It is described as one of the
characteristics in Orwell's famous book ``1984.'' Dystopian is another
synonym for Orwellian. It gives the government a massive amount of
power, coercion and control over the public. Yes, perfect surveillance
could, if in the hands of benign, good actors, protect us and keep us
safe from bad people.
In our country, we can easily see people who suffer from what I label
as Trump derangement syndrome. These are people who are alarmed that
Donald Trump would have access to information. Imagine if Donald Trump
could control this money. A lot of people in our country would be
scared to death. On the other hand, we can imagine maybe somebody from
the political left who would control this money. We could say that that
is pretty creepy.
Just like in ``The Lord of the Rings'' where they had the one ring to
rule them all. The only good thing to do with the one ring to rule them
all is destroy it.
Actively, right now, the Federal Reserve is hiring coders to write
code and develop a central bank digital currency. Actively, right now,
our allies are working to develop this.
Actively, right now, just as the gentleman from Arizona (Mr.
Schweikert) who spoke right before me addressed, the United States has
a massive debt problem. So does a lot of the rest of the world.
The last time the planet had this much debt was at the end of World
War II. The main difference is at the end of World War II, we knew we
had to spend less money, and we did. Our debt-to-GDP ratio, the amount
of money we owe versus the size of our economy, is about the same size
as it is right now.
Instead of spending less, right now we can't even agree to cut off
$9.4 billion in DOGE cuts. That is 0.13 percent of what our United
States Government is going to spend this year. It passed the House with
no support from Democrats and four Republicans voting against it, but
it can't get a floor vote in the Senate yet.
Think about this. At the end of World War II, we knew we had to spend
less. Even then, they did a monetary reset. Some people might have
heard of this idea of a great reset. One of the core components of it
is resetting the money system.
The money system they have in mind is the central bank digital
currency. When a crisis occurs, they might say that, well, there are
all kinds of things we could do, but here is what we can do now. It
would take forever to develop every other alternative. What we could do
now is what we have been working on for a decade. We could launch this
central bank digital currency. It will solve everything. It will keep
us safe. It will catch the tax evaders, the money launderers, and the
illicit finance.
In the hands of a good leader, it could. The reality is we know, as
our Founders recognized in Federalist Paper after Federalist Paper and
in the very structure of our government, eventually somebody who isn't
benign is going to have the power.
For ``The Lord of the Rings'' fans, they know that even the best
person, when they put the ring on, it is tempting to do evil things.
That is what is going to happen with this.
We have to stop it right now. When he came into office, Donald
Trump's executive order, among digital assets, banned central bank
digital currency.
That is why my colleague from Minnesota (Mr. Emmer) has moved a bill
to ban central bank digital currency. Unfortunately, it hasn't gotten a
vote on the floor of this House this term in the House of
Representatives, and it doesn't have a clear path through the Senate.
While it is the creepiest surveillance tool I have ever seen, I can't
get my coalition of Republicans and Democrats to oppose it. Last
Congress, I had a coalition of 123 Republicans and 96 Democrats who
voted to end the evasion of the Fourth Amendment.
[[Page H3006]]
The Fourth Amendment is supposed to protect our privacy. The
government is supposed to get our data only with probable cause or a
warrant or a subpoena from a court. They are buying our data. They are
creating a market for data, and they are buying their way around the
Fourth Amendment. We wanted to turn that off.
The Fourth Amendment doesn't regulate private entities, but it does
regulate the government. In part, the government has a power that no
private-sector body does. They can put us in jail. They can deprive us
of life, liberty, and property.
I am glad that we have this bipartisan coalition, but I don't
understand why Democrats are more concerned about the ability to
monitor our transactions than they are about the invasion of privacy. I
hope we restore that coalition on this and we can work together to ban
central bank digital currency.
I truly believe this poses an existential threat to Western
civilization. If this thing takes effect, it is a massive amount of
power. It is the kind of power that the Death Star has over
civilization. People think they would resist. A lot of people won't
even go vote. How aggressively are they going to resist when the
government shuts off access to their bank?
We had a trial run of this during COVID. Lots of people really
objected to all sorts of things about COVID policies, like when their
workplace imposed mandates and restrictions including shots that
weren't really tested or proven. Now we find out that the data, there
is a lot of concern about mRNA, in particular.
I talked to nurses who were crying in our office, but they felt like
they couldn't risk losing their job. They chose to get shots that they
were concerned about. The coercive power of the access to earning a
living is a massive amount of power. People can't afford it. They can't
pay their way to live. They can't raise their family.
This power is way bigger than that. We have got to stop this. We have
a President who wants to stop it. He issued an executive order, but we
don't have a legislature that is doing the work to stop it.
We were talking about moving crypto bills today. The Senate passed
the GENIUS Act in the Senate Committee on Banking, Housing, and Urban
Affairs and on the floor of the Senate, which regulates stablecoin.
Stablecoins are about 7 percent of the crypto market. The rest is
market structure. I have had a bill to regulate that since 2018. For
over 7 years, I have been trying to stop this. I do not want to stop
the good things. I do not want to stop the market from things like
bitcoin, bitcoin ETFs, or all other kinds of use cases that are good. I
do not want to stop self-custody but protect self-custody so that we
protect the ability to do transactions.
We are trying to stop the counter to it, central bank digital
currency, the one ring to rule them all. We have been trying to stop it
for that long. The idea was maybe not even possible technologically
when science fiction writers were writing ``Brave New World'' or
``1984'' or ``Fahrenheit 451.'' In Scripture, how could this even
happen, when we read Revelation through all time?
Today, we can see the technology that can do it. With artificial
intelligence, it is even quicker. We are here, talking about an AI
provision in the One Big Beautiful Bill Act that stays. No matter what
else they rule out, they seem to find a way for the AI provision to be
there for more surveillance on more people.
We have got to stop this. We need the legislature to step up and do
it. I plead with people everywhere I can, don't be fearful of all
digital assets. For example, bitcoin is 180 degrees different than
central bank digital currency.
{time} 1720
Mr. Speaker, do everything you can to stop the government's power
grab with this, or the superficial layer that is really just cosmetic
where the big banks offer a cosmetic layer of stablecoins but on the
back end it is effectively a central bank digital currency operated by
not just the Federal Reserve, but the central banks around the world
working together with the Bank for International Settlements to create
this system.
It is a true threat to Western Civilization and maybe something that
to some of my colleagues who couldn't be here tonight also is as big of
a deal to them. I appreciate those people who have cosponsored and
voted for Tom Emmer's bill. I hope we can vote on it soon in the
House, and the Senate takes it up.
Mr. Speaker, I yield back the balance of my time.
____________________