[House Report 119-92]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-92
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ANTI-CBDC SURVEILLANCE STATE ACT
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May 6, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
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Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1919]
The Committee on Financial Services, to whom was referred
the bill (H.R. 1919) to amend the Federal Reserve Act to
prohibit the Federal reserve banks from offering certain
products or services directly to an individual, to prohibit the
use of central bank digital currency for monetary policy, and
for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 3
Committee Consideration.......................................... 4
Related Hearings................................................. 6
Committee Votes.................................................. 6
Committee Oversight Findings..................................... 9
Performance Goals and Objectives................................. 9
Committee Cost Estimate.......................................... 9
New Budget Authority and CBO Cost Estimate....................... 9
Unfunded Mandates Statement...................................... 9
Earmark Statement................................................ 9
Federal Advisory Committee Act Statement......................... 10
Applicability to the Legislative Branch.......................... 10
Duplication of Federal Programs.................................. 10
Section-by-Section Analysis of the Legislation................... 10
Changes in Existing Law Made by the Bill, as Reported............ 11
Minority Views or Supplemental Views, Additional Views, or
Dissenting Views............................................... 19
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Anti-CBDC Surveillance State Act''.
SEC. 2. PROHIBITION ON FEDERAL RESERVE BANKS RELATING TO CERTAIN
PRODUCTS OR SERVICES FOR INDIVIDUALS AND PROHIBITION ON
DIRECTLY ISSUING A CENTRAL BANK DIGITAL CURRENCY.
Section 16 of the Federal Reserve Act (12 U.S.C. 411 et seq.) is
amended by adding at the end the following new paragraph:
``(18)(A) A Federal reserve bank may not--
``(i) offer financial products or services directly to an
individual;
``(ii) maintain an account on behalf of an individual; or
``(iii) issue a central bank digital currency, or any digital
asset that is substantially similar under any other name or
label.
``(B) In this paragraph, the term `central bank digital currency' has
the meaning given that term under section 10(11)(D).''.
SEC. 3. PROHIBITION ON FEDERAL RESERVE BANKS INDIRECTLY ISSUING A
CENTRAL BANK DIGITAL CURRENCY.
Section 16 of the Federal Reserve Act (12 U.S.C. 411 et seq.), as
amended by section 2, is further amended by adding at the end the
following paragraph:
``(19)(A) A Federal reserve bank may not offer a central bank digital
currency, or any digital asset that is substantially similar under any
other name or label, indirectly to an individual through a financial
institution or other intermediary.
``(B) In this paragraph, the term `central bank digital currency' has
the meaning given that term under section 10(11)(D).''.
SEC. 4. PROHIBITION WITH RESPECT TO CENTRAL BANK DIGITAL CURRENCY.
Section 10 of the Federal Reserve Act (12 U.S.C. 241 et seq.) is
amended by inserting before paragraph (12) the following:
``(11) Prohibition with respect to central bank digital
currency.--
``(A) In general.--The Board of Governors of the
Federal Reserve System may not test, study, develop,
create, or implement a central bank digital currency,
or any digital asset that is substantially similar
under any other name or label.
``(B) Monetary policy.--The Board of Governors of the
Federal Reserve System and the Federal Open Market
Committee may not use a central bank digital currency
to implement monetary policy, or any digital asset that
is substantially similar under any other name or label.
``(C) Exception.--Subparagraph (A) and sections
16(18)(A)(iii) and 16(19)(A) may not be construed to
prohibit any dollar-denominated currency that is open,
permissionless, and private, and fully preserves the
privacy protections of United States coins and physical
currency.
``(D) Central bank digital currency defined.--In this
paragraph, the term `central bank digital currency'
means a form of digital money or monetary value that
is--
``(i) denominated in the national unit of
account;
``(ii) a direct liability of the Federal
Reserve System; and
``(iii) widely available to the general
public.''.
SEC. 5. SENSE OF CONGRESS.
It is the sense of Congress that the Board of Governors of the
Federal Reserve System currently does not have the authority to issue a
central bank digital currency, or any digital asset that is
substantially similar under any other name or label, and will not have
such authority unless Congress grants it under Congress's Article 1
Section 8 powers.
Purpose and Summary
Introduced on March 6, 2025, by Representative Emmer, H.R.
1919, the Anti-CBDC Surveillance State Act, would amend Section
16 of the Federal Reserve Act to prohibit the Federal Reserve
Banks from issuing a Central Bank Digital Currency (CBDC), or
any substantially similar digital asset. Additionally, the bill
would prohibit the Federal Reserve System and the Federal Open
Market Committee from using a CBDC to implement monetary
policy. The bill also expresses the sense of Congress that the
Board of Governors of the Federal Reserve System currently does
not have the authority to issue a U.S. CBDC.
Background and Need for Legislation
A CBDC is a digital representation of fiat currency issued
by a central bank. It uses an electronic record or digital
``token'' to represent fiat currency, denominated in the
national unit of account. To date, the Federal Reserve's
analysis states a U.S. CBDC ``would best serve the needs of the
United States by being privacy-protected, intermediated, widely
transferable, and identity-verified.''\1\ Under a potential
intermediated retail model, consumers would hold a U.S. CBDC in
an account at a financial institution responsible for providing
traditional consumer banking services or at a non-bank fintech
firm to manage holdings and payments. In contrast to a retail
CBDC, a wholesale CBDC would be used only by financial
institutions for interbank settlement.
---------------------------------------------------------------------------
\1\Bd. of Govs. of the Fed. Reserve System, Money and Payments: The
U.S. Dollar in the Age of Digital Transformation, Federal Reserve (Jan.
20, 2022) https://www.federalreserve.gov/publications/money-and-
payments-discussion-paper.htm, pg. 2.
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On November 15, 2021, Committee Republicans issued
principles to use to evaluate a U.S. CBDC. These principles
held that any potential Federal Reserve-issued digital currency
must: (1) maintain the dollar as the world's reserve currency
and the preeminence of the U.S. payment system; (2) not impede
ongoing development of stablecoins; (3) promote private sector
innovation and foster competition; and (4) address privacy and
security protections. Collectively, these principles ensure
that any proposal does not allow the Federal Reserve or any
other government agency to monopolize or weaponize a CBDC.
Further, these principles ensure policymakers thoroughly weigh
the risks of a U.S. CBDC.
In January 2022, the Board of Governors of the Federal
Reserve System released a paper, ``Money and Payments: The U.S.
Dollar in the Age of Digital Transformation.''\2\ In the paper,
the Board sought to facilitate a conversation around potential
design configurations for a U.S. CBDC. Around the same time,
the Federal Reserve Bank of Boston and the Massachusetts
Institute of Technology had an initiative to test the
performance and scalability of a U.S. CBDC. This activity
indicates that the Federal Reserve was expending significant
resources in furtherance of a U.S. CBDC.
---------------------------------------------------------------------------
\2\Bd. of Govs. of the Fed. Reserve System, Money and Payments: The
U.S. Dollar in the Age of Digital Transformation, (Jan. 2022) Money and
Payments: The U.S. Dollar in the Age of Digital Transformation.
---------------------------------------------------------------------------
Moreover, a review of the Federal Reserve Act suggests the
Federal Reserve does not have the legal authority to issue a
CBDC to individuals absent authorizing legislation from
Congress. The Supreme Court has also recognized Congress' power
to coin money and regulate the value thereof, confirming
Congress' authority to regulate each phase of currency.
During a Humphrey-Hawkins hearing in June 2023, Federal
Reserve Chair Powell emphasized that there would be financial
privacy risks for Americans if the Federal Reserve were to
issue a CBDC directly to individuals. Chair Powell explained
that the United States is a long way away from a CBDC but ``if
we were to support at some point in the future a CBDC, it would
be one that would be intermediating through the banking system
and not directly at the Fed.''\3\
---------------------------------------------------------------------------
\3\The Federal Reserve's Semi-Annual Monetary Policy Report:
Hearing Before the H. Comm. on Financial Serv., 119th Cong. (Jun. 21,
2023)
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Committee Consideration
115TH CONGRESS
The Subcommittee on Monetary Policy and Trade held a
hearing on July 18, 2018, titled ``The Future of Money: Digital
Currency.''
116TH CONGRESS
The Committee on Financial Services held a hearing on July
10, 2019, titled ``Monetary Policy and the State of the
Economy.''
The Committee on Financial Services held a hearing on July
17, 2019, titled ``Examining Facebook's Proposed Cryptocurrency
and Its Impact on Consumers, Investors, and the American
Financial System.''
The Committee on Financial Services held a hearing on
February 11, 2020, titled ``Monetary Policy and the State of
the Economy.''
The Task Force on Financial Technology of the Committee on
Financial Services held a hearing on June 11, 2020, titled
``Inclusive Banking During a Pandemic: Using Fed Accounts and
Digital Tools to Improve Delivery of Stimulus Payments.''
The Committee on Financial Services held a hearing on June
17, 2020, titled ``Monetary Policy and the State of the
Economy.''
117TH CONGRESS
The Committee on Financial Services held a hearing on
February 24, 2021, titled ``Monetary Policy and the State of
the Economy.''
The Task Force on Financial Technology of the Committee on
Financial Services held a hearing on June 15, 2021, titled
``Digitizing the Dollar: Investigating the Technological
Infrastructure, Privacy, and Financial Inclusion Implications
of Central Bank Digital Currencies.''
The Committee on Financial Services held a hearing on July
14, 2021, titled ``Monetary Policy and the State of the
Economy.''
The Subcommittee on National Security, International
Development, and Monetary Policy of the Committee on Financial
Services held a hearing on July 27, 2021, titled ``The Promises
and Perils of Central Bank Digital Currencies.''
The Committee on Financial Services held a hearing on
December 8, 2021, titled ``Digital Assets and the Future of
Finance: Understanding the Challenges and Benefits of Financial
Innovation in the United States.''
The Committee on Financial Services held a hearing on
February 8, 2022, titled ``Digital Assets and the Future of
Finance: The President's Working Group on Financial Markets'
Report on Stablecoins.''
The Committee on Financial Services held a hearing on March
2, 2022, titled ``Monetary Policy and the State of the
Economy.''
The Committee on Financial Services held a hearing on April
6, 2022, titled ``The Annual Testimony of the Secretary of the
Treasury on the State of the International Financial System.''
The Committee on Financial Services held a hearing on May
26, 2022, titled ``Digital Assets and the Future of Finance:
Examining the Benefits and Risks of a U.S. Central Bank Digital
Currency.''
The Committee on Financial Services held a hearing on June
23, 2022, titled ``Monetary Policy and the State of the
Economy.''
118TH CONGRESS
On April 19, 2023, the Subcommittee on Digital Assets,
Financial Technology and Inclusion of the Committee on
Financial Services held a hearing, entitled, ``Understanding
Stablecoins' Role in Payments and the Need for Legislation.''
On May 18, 2023, the Subcommittee on Digital Assets,
Financial Technology and Inclusion of the Committee on
Financial Services held a hearing, entitled ``Putting the
`Stable' in `Stablecoins': How Legislation Will Help
Stablecoins Achieve Their Promise.''
On June 7, 2023, the Subcommittee on National Security,
Illicit Finance, and International Financial Institutions of
the Committee on Financial Services held a hearing entitled
``Dollar Dominance: Preserving the U.S. Dollar's Status as the
Global Reserve Currency.''
On September 14, 2023, the Subcommittee on Digital Assets,
Financial Technology and Inclusion of the Committee on
Financial Services held a hearing, entitled ``Digital Dollar
Dilemma: The Implications of a Central Bank Digital Currency
and Private Sector Alternatives.''
119TH CONGRESS
On March 6, 2025, Representative Tom Emmer (R-MN),
introduced H.R. 1919, the Anti-CBDC Surveillance State Act,
with Representatives French Hill (R-AR), John R. Moolenaar (R-
MI), Richard Hudson (R-NC), Andy Ogles (R-TN), Mike Bost (R-
IL), Scott Franklin (R-FL), Marjorie Taylor Greene (R-GA), Andy
Biggs (R-AZ), Michael Cloud (R-TX), Mike Flood (R-NE), Paul A.
Gosar (R-AZ), Young Kim (R-CA), Dan Meuser (R-PA), Warren
Davidson (R-OH), Kevin Kiley (R-CA), Byron Donalds (R-FL),
Scott Fitzgerald (R-WI), Anna Paulina Luna (R-FL), Andrew
Garbarino (R-NY), Frank Lucas (R-OK). Pete Sessions (R-TX),
Bill Huizenga (R-MI), Ann Wagner (R-MO), Andy Barr (R-KY),
Roger Williams (R-TX), Barry Loudermilk (R-GA), John Rose (R-
TN), Bryan Steil (R-WI), William Timmons (R-SC), Ralph Norman
(R-SC), Michael Lawler (R-NY), Monica De La Cruz (R-TX), Zach
Nunn (R-IA), Maria Salazar (R-FL), Mike Haridopolos (R- FL),
Troy Downing (R-MT), Tim Moore (R-NC), Don Bacon (R-NE), Josh
Brecheen (R-OK), Mike Kelly (R-PA), Glenn Grothman (R-WI),
Nancy Mace (R-SC), Guy Reschenthaler (R-PA), Mike Rogers (R-
AL), David Rouzer (R-NC), David Valadao (R-CA), Jefferson Van
Drew (R-NJ), Randy Weber (R-TX), Erin Houchin (R-IN), Harriet
Hageman (R-WY), Nick Langworthy (R-NY), Lance Gooden (R-TX),
Brad Finstad (R-MN), Michelle Fischbach (R-MN), Aaron Bean (R-
FL), Mark Amodei (R-NV), Sam Graves (R-MO), Diana Harshbarger
(R-TN), Elijah Crane (R-AZ), Juan Ciscomani (R-AZ), James Baird
(R-IN), Trent Kelly (R-MS), Kat Cammack (R-FL), Chuck
Fleischmann (R-TN), Greg Murphy, M.D. (R-NC), Stephanie Bice
(R-OK), John Carter (R-TX), Dusty Johnson (R-SD), Andrew Clyde
(R-GA), Tom Tiffany (R-WI), Jack Bergman (R-MI), Beth Van Duyne
(R-TX), Mike Collins (R-GA), Bob Latta (R-OH), Dan Crenshaw (R-
TX), Jake Ellzey (R-TX), Darrell Issa (R-CA), Burgess Owens (R-
UT), Scott Perry (R-PA), Ryan Zinke (R-MT), Clay Higgins (R-
LA), Ashley Hinson (R-IA), Troy Balderson (R-OH), Richard
McCormick (R-GA), Mike Carey (R-OH), Rob Wittman (R-VA), Chip
Roy (R-TX), Michael McCaul (R-TX), John Rutherford (R-FL),
Adrian Smith (R-NE), Claudia Tenney (R-NY), Jeff Crank (R-CO),
Michael Baumgartner (R-WA), Ryan Mackenzie (R-PA), Addison
McDowell (R-NC), Mark Messmer (R-IN), Derek Schmidt (R-KS),
Dave Taylor (R-OH), Brandon Gill (R-TX), and Michael Guest (R-
MS) as original cosponsors. Representatives Craig Goldman (R-
TX), Cliff Bentz (R-OR), Barry Moore (R-AL), Julia Letlow (R-
LA), Mike Ezell (R-MS), Tom Cole (R-OK), Randy Feenstra (R-IA),
Tracey Mann (R-KS), Darin LaHood (R-IL), Ronny Jackson (R-TX),
Ben Cline (R-VA), Nathaniel Moran (R-TX), Brett Guthrie (R-KY),
Rudy Yakym (R-IN), August Pfluger (R-TX), Mark Green (R-TN),
Marlin Stutzman (R-IN), Brian Babin (R-TX), Troy Nehls (R-TX),
Thomas Kean (R-NJ), Derrick Van Orden (R-WI), Gus Bilirakis (R-
FL), Mike Kennedy (R-UT), Steve Womack (R-AR), Kevin Hern (R-
OK), Pete Stauber (R-MN), John McGuire (R-VA), Robert Bresnahan
(R-PA), Nicholas Begich (R-AK), Austin Scott (R-GA), Chuck
Edwards (R-NC), Brian Jack (R-GA), Mary Miller (R-IL), Greg
Steube (R-FL), and Michael Rulli (R-OH) were added subsequently
as cosponsors. The bill was referred solely to the Committee on
Financial Services.
Related Hearings
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 1919:
On March 11, 2025, the Full Committee held a hearing titled
``Navigating the Digital Payments Ecosystem: Examining a
Federal Framework for Payment Stablecoins and Consequences of a
U.S. Central Bank Digital Currency.'' A discussion draft
version of the bill was considered in this hearing. The
following witnesses testified: Caroline Butler, Global Head of
Digital Assets, The Bank of New York Mellon Corporation;
Charles Cascarilla, CEO and Co-Founder, Paxos; Patrick
Collison, CEO, Stripe; Randall Guynn, Chairman, Financial
Institutions Group, Davis Polk & Wardwell; and Carole House,
Senior Fellow, GeoEconomic Center, Atlantic Council.
The Committee on Financial Services met in open session on
April 2, 2025, to consider, among others, H.R. 1919.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
On April 2, 2025, H.R. 1919 was ordered to be reported
favorably to the House by a recorded vote of 27 ayes and 22
nays, a quorum being present. (Record Vote No. FC-062). Before
the question to report was called, the Committee adopted an
amendment in the nature of a substitute that made minor edits
and technical changes, offered by Representative Emmer.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goals of H.R. 1919 are to
prohibit the Federal Reserve Banks from issuing a CBDC or any
substantially similar digital asset and to prohibit the Federal
Reserve System and the Federal Open Market Committee from using
a CBDC to implement monetary policy.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 1919. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of House rule XIII, the Committee
will adopt as its own the cost estimate by the Director of the
Congressional Budget Office once it has been prepared.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
Unfunded Mandates Statement
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Committee will adopt the estimate once
it has been prepared by the Director.
Earmark Statement
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the resolution and states that the provisions
of the bill do not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits within the meaning of
the rule.
Federal Advisory Committee Act Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides the short title is the ``Anti-CBDC
Surveillance State Act.''
Section 2. Prohibition on Federal Reserve Banks relating to certain
products or services for individuals and prohibition on
directly issuing a central bank digital currency
Section 2 amends the Federal Reserve Act to preclude a
Federal Reserve Bank from offering products or services
directly to individuals, from maintaining an account for an
individual, or from issuing a central bank digital currency.
Section 3. Prohibition on Federal Reserve Banks indirectly issuing a
central bank digital currency
Section 3 amends the Federal Reserve Act to preclude a
Federal Reserve Bank from offering a central bank digital
currency.
Section 4. Prohibition with respect to central bank digital currency
Section 4 amends the Federal Reserve Act to preclude
testing, studying, developing, creating, or implementing a
central bank digital currency, and to preclude the Federal
Reserve and Federal Open Market Committee from using a central
bank digital currency to implement monetary policy. Section 4
exempts dollar-denominated currencies that are open,
permissionless, and privacy preserving from this prohibition.
Section 5. Sense of Congress
Section 5 expresses the Sense of Congress that the Board of
Governors of the Federal Reserve currently does not have the
authority to issue a central bank digital currency and will not
have such authority unless Congress grants it under Congress's
Article 1 Section 8 powers.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
FEDERAL RESERVE ACT
* * * * * * *
board of governors of the federal reserve system
Sec. 10. The Board of Governors of the Federal Reserve System
(hereinafter referred to as the ``Board'') shall be composed of
seven members, to be appointed by the President, by and with
the advice and consent of the Senate, after the date of
enactment of the Banking Act of 1935, for terms of fourteen
years except as hereinafter provided, but each appointive
member of the Federal Reserve Board in office on such date
shall continue to serve as a member of the Board until February
1, 1936, and the Secretary of the Treasury and the Comptroller
of the Currency shall continue to serve as members of the Board
until February 1, 1936. In selecting the members of the Board,
not more than one of whom shall be selected from any one
Federal Reserve district, the President shall have due regard
to a fair representation of the financial, agricultural,
industrial, and commercial interests, and geographical
divisions of the country. In selecting members of the Board,
the President shall appoint at least 1 member with demonstrated
primary experience working in or supervising community banks
having less than $10,000,000,000 in total assets. The members
of the Board shall devote their entire time to the business of
the Board and shall each receive an annual salary of $15,000,
payable monthly, together with actual necessary traveling
expenses.
The members of the Board shall be ineligible during the time
they are in office and for two years thereafter to hold any
office, position, or employment in any member bank, except that
this restriction shall not apply to a member who has served the
full term for which he was appointed. Upon the expiration of
the term of any appointive member of the Federal Reserve Board
in office on the date of enactment of the Banking Act of 1935,
the President shall fix the term of the successor to such
member at not to exceed fourteen years, as designated by the
President at the time of nomination, but in such manner as to
provide for the expiration of the term of not more than one
member in any two-year period, and thereafter each member shall
hold office for a term of fourteen years from the expiration of
the term of his predecessor, unless sooner removed for cause by
the President. Of the persons thus appointed, 1 shall be
designated by the President, by and with the advice and consent
of the Senate, to serve as Chairman of the Board for a term of
4 years, and 2 shall be designated by the President, by and
with the advice and consent of the Senate, to serve as Vice
Chairmen of the Board, each for a term of 4 years, 1 of whom
shall serve in the absence of the Chairman, as provided in the
fourth undesignated paragraph of this section, and 1 of whom
shall be designated Vice Chairman for Supervision. The Vice
Chairman for Supervision shall develop policy recommendations
for the Board regarding supervision and regulation of
depository institution holding companies and other financial
firms supervised by the Board, and shall oversee the
supervision and regulation of such firms. The chairman of the
Board, subject to its supervision, shall be its active
executive officer. Each member of the Board shall within
fifteen days after notice of appointment make and subscribe to
the oath of office. Upon the expiration of their terms of
office, members of the Board shall continue to serve until
their successors are appointed and have qualified. Any person
appointed as a member of the Board after the date of enactment
of the Banking Act of 1935 shall not be eligible for
reappointment as such member after he shall have served a full
term of fourteen years.
The Board of Governors of the Federal Reserve System shall
have power to levy semiannually upon the Federal reserve banks,
in proportion to their capital stock and surplus, an assessment
sufficient to pay its estimated expenses and the salaries of
its members and employees for the half year succeeding the
levying of such assessment, together with any deficit carried
forward from the preceding half year, and such assessments may
include amounts sufficient to provide for the acquisition by
the Board in its own name of such site or building in the
District of Columbia as in its judgment alone shall be
necessary for the purpose of providing suitable and adequate
quarters for the performance of its functions. After September
1, 2000, the Board may also use such assessments to acquire, in
its own name, a site or building (in addition to the facilities
existing on such date) to provide for the performance of the
functions of the Board. After approving such plans, estimates,
and specifications as it shall have caused to be prepared, the
Board may, notwithstanding any other provision of law, cause to
be constructed on any site so acquired by it a building or
buildings suitable and adequate in its judgment for its
purposes and proceed to take all such steps as it may deem
necessary or appropriate in connection with the construction,
equipment, and furnishing of such building or buildings. The
Board may maintain, enlarge, or remodel any building or
buildings so acquired or constructed and shall have sole
control of such building or buildings and space therein.
The principal offices of the Board shall be in the District
of Columbia. At meetings of the Board the chairman shall
preside, and, in his absence, the vice chairman shall preside.
In the absence of the chairman and the vice chairman, the Board
shall elect a member to act as chairman pro tempore. The Board
shall determine and prescribe the manner in which its
obligations shall be incurred and its disbursements and
expenses allowed and paid, and may leave on deposit in the
Federal Reserve banks the proceeds of assessments levied upon
them to defray its estimated expenses and the salaries of its
members and employees, whose employment, compensation, leave,
and expenses shall be governed solely by the provisions of this
Act, specific amendments thereof, and rules and regulations of
the Board not inconsistent therewith; and funds derived from
such assessments shall not be construed to be Government funds
or appropriated moneys. No member of the Board of Governors of
the Federal Reserve System shall be an officer or director of
any bank, banking institution, trust company, or Federal
Reserve bank or hold stock in any bank, banking institution, or
trust company; and before entering upon his duties as a member
of the Board of Governors of the Federal Reserve System he
shall certify under oath that he has complied with this
requirement, and such certification shall be filed with the
secretary of the Board. Whenever a vacancy shall occur, other
than by expiration of term, among the six members of the Board
of Governors of the Federal Reserve System appointed by the
President as above provided, a successor shall be appointed by
the President, by and with the advice and consent of the
Senate, to fill such vacancy, and when appointed he shall hold
office for the unexpired term of his predecessor.
The President shall have power to fill all vacancies that
may happen on the Board of Governors of the Federal Reserve
System during the recess of the Senate by granting commissions
which shall expire with the next session of the Senate.
Nothing in this Act contained shall be construed as taking
away any powers heretofore vested by law in the Secretary of
the Treasury which relate to the supervision, management, and
control of the Treasury Department and bureaus under such
department, and wherever any power vested by this Act in the
Board of Governors of the Federal Reserve System or the Federal
reserve agent appears to conflict with the powers of the
Secretary of the Treasury, such powers shall be exercised
subject to the supervision and control of the Secretary.
The Board of Governors of the Federal Reserve System shall
annually make a full report of its operations to the Speaker of
the House of Representatives, who shall cause the same to be
printed for the information of the Congress. The report
required under this paragraph shall include the reports
required under section 707 of the Equal Credit Opportunity Act,
section 18(f)(7) of the Federal Trade Commission Act, section
114 of the Truth in Lending Act, and the tenth undesignated
paragraph of this section.
No Federal Reserve bank may authorize the acquisition or
construction of any branch building, or enter into any contract
or other obligation for the acquisition or construction of any
branch building, without the approval of the Board.
The Board of Governors of the Federal Reserve System shall
keep a complete record of the action taken by the Board and by
the Federal Open Market Committee upon all questions of policy
relating to open-market operations and shall record therein the
votes taken in connection with the determination of open-market
policies and the reasons underlying the action of the Board and
the Committee in each instance. The Board shall keep a similar
record with respect to all questions of policy determined by
the Board, and shall include in its annual report to the
Congress a full account of the action so taken during the
preceding year with respect to open-market policies and
operations and with respect to the policies determined by it
and shall include in such report a copy of the records required
to be kept under the provisions of this paragraph.
(11) Prohibition with respect to central bank digital
currency.--
(A) In general.--The Board of Governors of
the Federal Reserve System may not test, study,
develop, create, or implement a central bank
digital currency, or any digital asset that is
substantially similar under any other name or
label.
(B) Monetary policy.--The Board of Governors
of the Federal Reserve System and the Federal
Open Market Committee may not use a central
bank digital currency to implement monetary
policy, or any digital asset that is
substantially similar under any other name or
label.
(C) Exception.--Subparagraph (A) and sections
16(18)(A)(iii) and 16(19)(A) may not be
construed to prohibit any dollar-denominated
currency that is open, permissionless, and
private, and fully preserves the privacy
protections of United States coins and physical
currency.
(D) Central bank digital currency defined.--
In this paragraph, the term ``central bank
digital currency'' means a form of digital
money or monetary value that is--
(i) denominated in the national unit
of account;
(ii) a direct liability of the
Federal Reserve System; and
(iii) widely available to the general
public.
(12) Appearances before congress.--The Vice Chairman
for Supervision shall appear before the Committee on
Banking, Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House of
Representatives and at semi-annual hearings regarding
the efforts, activities, objectives, and plans of the
Board with respect to the conduct of supervision and
regulation of depository institution holding companies
and other financial firms supervised by the Board.
* * * * * * *
note issues.
Sec. 16. Federal Reserve notes, to be issued at the
discretion of the Board of Governors of the Federal Reserve
System for the purpose of making advances to Federal Reserve
banks through the Federal reserve agents as hereinafter set
forth and for no other purpose, are hereby authorized. The said
notes shall be obligations of the United States and shall be
receivable by all national and member banks and Federal Reserve
banks and for all taxes, customs, and other public dues. They
shall be redeemed in lawful money on demand at the Treasury
Department of the United States, in the city of Washington,
District of Columbia, or at any Federal Reserve bank.
Any Federal Reserve bank may make application to the local
Federal Reserve agent for such amount of the Federal Reserve
notes hereinbefore provided for as it may require. Such
application shall be accompanied with a tender to the local
Federal Reserve agent of collateral in amount equal to the sum
of the Federal Reserve notes thus applied for and issued
pursuant to such application. The collateral security thus
offered shall be notes, drafts, bills of exchange, or
acceptances acquired under section 10A, 10B, 13, or 13A of this
Act, or bills of exchange endorsed by a member bank of any
Federal Reserve district and purchased under the provisions of
section 14 of this Act, or bankers' acceptances purchased under
the provisions of said section 14, or gold certificates, or
Special Drawing Right certificates, or any obligations which
are direct obligations of, or are fully guaranteed as to
principal and interest by, the United States or any agency
thereof, or assets that Federal Reserve banks may purchase or
hold under section 14 of this Act or any other asset of a
Federal reserve bank. In no event shall such collateral
security be less than the amount of Federal Reserve notes
applied for. The Federal Reserve agent shall each day notify
the Board of Governors of the Federal Reserve System of all
issues and withdrawals of Federal Reserve notes to and by the
Federal Reserve bank to which he is accredited. The said Board
of Governors of the Federal Reserve System may at any time call
upon a Federal Reserve bank for additional security to protect
the Federal Reserve notes issued to it. Collateral shall not be
required for Federal Reserve notes which are held in the vaults
of, or are otherwise held by or on behalf of, Federal Reserve
banks.
Federal Reserve notes shall bear upon their faces a
distinctive letter and serial number which shall be assigned by
the Board of Governors of the Federal Reserve System to each
Federal Reserve bank. Federal Reserve notes unfit for
circulation shall be canceled, destroyed, and accounted for
under procedures prescribed and at locations designated by the
Secretary of the Treasury. Upon destruction of such notes,
credit with respect thereto shall be apportioned among the
twelve Federal Reserve banks as determined by the Board of
Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System shall
have the right, acting through the Federal Reserve agent, to
grant in whole or in part, or to reject entirely the
application of any Federal Reserve bank for Federal Reserve
notes; but to the extent that such applicaton may be granted
the Board of Governors of the Federal Reserve System shall,
through its local Federal Reserve agent, supply Federal Reserve
notes to the banks so applying, and such bank shall be charged
with the amount of the notes issued to it and shall pay such
rate of interest as may be established by the Board of
Governors of the Federal Reserve System on only that amount of
such notes which equals the total amount of its outstanding
Federal Reserve notes less the amount of gold certificates held
by the Federal Reserve agent as collateral security. Federal
Reserve notes issued to any such bank shall, upon delivery,
together with such notes of such Federal Reserve bank as may be
issued under section 18 of this Act upon security of United
States 2 per centum Government bonds, become a first and
paramount lien on all the assets of such bank.
Any Federal Reserve bank may at any time reduce its
liability for outstanding Federal Reserve notes by depositing
with the Federal Reserve agent its Federal Reserve notes, gold
certificates, Special Drawing Right certificates, or lawful
money of the United States. Federal Reserve notes so deposited
shall not be reissued, except upon compliance with the
conditions of an original issue. The liability of a Federal
Reserve bank with respect to its outstanding Federal Reserve
notes shall be reduced by any amount paid by such bank to the
Secretary of the Treasury under section 4 of the Old Series
Currency Adjustment Act.
Any Federal Reserve bank may at its discretion withdraw
collateral deposited with the local Federal Reserve agent for
the protection of its Federal Reserve notes issued to it and
shall at the same time substitute therefor other collateral of
equal amont with the approval of the Federal Reserve agent
under regulations to be prescribed by the Board of Governors of
the Federal Reserve System. Any Federal Reserve bank may retire
any of its Federal Reserve notes by depositing them with the
Federal Reserve agent or with the Treasurer of the United
States, and such Federal Reserve bank shall thereupon be
entitled to receive back the collateral deposited with the
Federal Reserve agent for the security of such notes. Any
Federal Reserve bank shall further be entitled to receive back
the collateral deposited with the Federal Reserve agent for the
security of any notes with respect to which such bank has made
payment to the Secretary of the Treasury under section 4 of the
Old Series Currency Adjustment Act. Federal Reserve notes so
deposited shall not be reissued except upon compliance with the
conditions of an original issue.
All Federal Reserve notes and all gold certificates, Special
Drawing Right certificates, and lawful money issued to or
deposited with any Federal Reserve agent under the provisions
of the Federal Reserve Act shall hereafter be held for such
agent, under such rules and regulations as the Board of
Governors of the Federal Reserve System may prescribe, in the
joint custody of himself and the Federal Reserve bank to which
he is accredited. Such agent and such Federal Reserve bank
shall be jointly liable for the safekeeping of such Federal
Reserve notes, gold certificates, Special Drawing Right
certificates, and lawful money. Nothing herein contained,
however, shall be construed to prohibit a Federal Reserve agent
from depositing gold certificates and Special Drawing Right
certificates with the Board of Governors of the Federal Reserve
System, to be held by such Board subject to his order, or with
the Treasurer of the United States for the purposes authorized
by law.
In order to furnish suitable notes for circulation as
Federal reserve notes, the Secretary of the Treasury shall
cause plates and dies to be engraved in the best manner to
guard against counterfeits and fraudulent alterations, and
shall have printed therefrom and numbered such quantities of
such notes of the denominations of $1, $2, $5, $10, $20, $50,
$100, $500, $1,000, $5,000, $10,000 as may be required to
supply the Federal reserve banks. Such notes shall be in form
and tenor as directed by the Secretary of the Treasury under
the provisions of this Act and shall bear the distinctive
numbers of the several Federal reserve banks through which they
are issued.
When such notes have been prepared, the notes shall
be delivered to the Board of Governors of the Federal
Reserve System subject to the order of the Secretary of
the Treasury for the delivery of such notes in
accordance with this Act.
The plates and dies to be procured by the Secretary of the
Treasury for the printing of such circulating notes shall
remain under his control and direction, and the expenses
necessarily incurred in executing the laws relating to the
procuring of such notes, and all other expenses incidental to
their issue and retirement, shall be paid by the Federal
reserve banks, and the Board of Governors of the Federal
Reserve System shall include in its estimate of expenses levied
against the Federal reserve banks a sufficient amount to cover
the expenses herein provided for.
The Secretary of the Treasury may examine the
plates, dies, bed pieces, and other material used in
the printing of Federal Reserve notes and issue
regulations relating to such examinations.
Any appropriation heretofore made out of the general funds
of the Treasury for engraving plates and dies, the purchase of
distinctive paper, or to cover any other expense in connection
with the printing of national-bank notes or notes provided for
by the Act of May thirtieth, nineteen hundred and eight, and
any distinctive paper that may be on hand at the time of the
passage of this Act may be used in the discretion of the
Secretary for the purposes of this Act, and should the
appropriations heretofore made be insufficient to meet the
requirements of this Act in addition to circulating notes
provided for by existing law, the Secretary is hereby
authorized to use so much of any funds in the Treasury not
otherwise appropriated for the purpose of furnishing the notes
aforesaid: Provided, however, That nothing in this section
contained shall be construed as exempting national banks or
Federal reserve banks from their liability to reimburse the
United States for any expenses incurred in printing and issuing
circulating notes. (Omitted from U.S. Code)
Every Federal reserve bank shall receive on deposit at par
from depository institutions or from Federal reserve banks
checks and other items, including negotiable orders of
withdrawal and share drafts and drafts drawn upon any of its
depositors, and when remitted by a Federal reserve bank, checks
and other items, including negotiable orders of withdrawal and
share drafts and drafts drawn by any depositor in any other
Federal reserve bank or depository institution upon funds to
the credit of said depositor in said reserve bank or depository
institution. Nothing herein contained shall be construed as
prohibiting a depository institution from charging its actual
expense incurred in collecting and remitting funds, or for
exchange sold to its patrons. The Board of Governors of the
Federal Reserve System shall, by rule, fix the charges to be
collected by the depository institutions from its patrons whose
checks and other items, including negotiable orders of
withdrawal and share drafts are cleared through the Federal
reserve Bank and the charge which may be imposed for the
service of clearing or collection rendered by the Federal
reserve bank.
The Board of Governors of the Federal Reserve System shall
make and promulgate from time to time regulations governing the
transfer of funds and charges therefor among Federal reserve
banks and their branches, and may at its discretion exercise
the functions of a clearing house for such Federal reserve
banks, or may designate a Federal reserve bank to exercise such
functions, and may also require each such bank to exercise the
functions of a clearing house for depository institutions.
The Secretary of the Treasury is hereby authorized and
directed to receive deposits of gold or of gold certificates or
of Special Drawing Right certificates with the Treasurer or any
Assistant Treasurer of the United States when tendered by any
Federal Reserve bank or Federal Reserve agent for credit to its
or his account with the Board of Governors of the Federal
Reserve System. The Secretary shall prescribe by regulation the
form of receipt to be issued by the Treasurer or Assistant
Treasurer to the Federal Reserve bank or Federal Reserve agent
making the deposit, and a duplicate of such receipt shall be
delivered to the Board of Governors of the Federal Reserve
System by the Treasurer at Washington upon proper advices from
any Assistant Treasurer that such deposit has been made.
Deposits so made shall be held subject to the orders of the
Board of Governors of the Federal Reserve System and deposits
of gold or gold certificates shall be payable in gold
certificates, and deposits of Special Drawing Right
certificates shall be payable in Special Drawing Right
certificates, on the order of the Board of Governors of the
Federal Reserve System to any Federal Reserve bank or Federal
Reserve agent at the Treasury or at the subtreasury of the
United States nearest the place of business of such Federal
Reserve bank or such Federal Reserve agent. The order used by
the Board of Governors of the Federal Reserve System in making
such payments shall be signed by the chairman or vice chairman,
or such other officers or members as the Board may by
regulation prescribe. The form of such order shall be approved
by the Secretary of the Treasury.
The expenses necessarily incurred in carrying out these
provisions, including the cost of the certificates or receipts
issued for deposits received, and all expenses incident to the
handling of such deposits shall be paid by the Board of
governors of the Federal Reserve System and included in its
assessments against the several Federal reserve banks.
Nothing in this section shall be construed as amending
section six of the Act of March fourteenth, nineteen hundred,
as amended by the Acts of March fourth, nineteen hundred and
seven, March second, nineteen hundred and eleven, and June
twelfth, nineteen hundred and sixteen, nor shall the provisions
of this section be construed to apply to the deposits made or
to the receipts or certificates issued under those Acts.
(18)(A) A Federal reserve bank may not--
(i) offer financial products or services directly to
an individual;
(ii) maintain an account on behalf of an individual;
or
(iii) issue a central bank digital currency, or any
digital asset that is substantially similar under any
other name or label.
(B) In this paragraph, the term ``central bank digital
currency'' has the meaning given that term under section
10(11)(D).
(19)(A) A Federal reserve bank may not offer a central bank
digital currency, or any digital asset that is substantially
similar under any other name or label, indirectly to an
individual through a financial institution or other
intermediary.
(B) In this paragraph, the term ``central bank digital
currency'' has the meaning given that term under section
10(11)(D).
* * * * * * *
MINORITY VIEWS
H.R. 1919 would immediately halt and prohibit the United
States from exploring the potential benefits of a central bank
digital currency (CBDC). A CBDC is a digital currency that is
issued by a country's central bank and the value of which is
pegged to the national currency. The two more prominent types
of CBDCs are ``retail CBDCs'' and ``wholesale CBDCs.'' Retail
CBDCs are made available to consumers, either directly from the
Fed (``direct CBDC'') or through a bank or other financial
institution (``intermediated or indirect CBDC'').\1\ A
wholesale CBDC would not be available to the public but rather
would only be available to banks and potentially other
financial institutions, and likely would be used for interbank
settlement or large cross-border payments.
---------------------------------------------------------------------------
\1\Cato, A Breakdown of the Different CBDC Models (Feb. 10, 2023).
---------------------------------------------------------------------------
H.R. 1919 would prohibit the Federal Reserve (Fed),
particularly their 12 Federal Reserve Banks, from offering
products or services directly to individuals; maintaining an
account for individuals; or researching, testing, or issuing a
retail CBDC, including indirectly through a financial
institution or other intermediary. The bill's sweeping ban
fails to accurately distinguish between retail and wholesale
CBDCs. For example, while some of the bill's provisions focus
on prohibiting a retail CBDC, the bill's new sense of Congress
that the Fed lacks authority to issue any kind of CBDC,
including wholesale CBDCs, would undermine opportunities to
research, test, and issue wholesale CBDCs that could
drastically reduce the costs of cross-border payments. For
example, one study from JPMorgan Chase and Oliver Wyman found
that global companies make more than $23 trillion in cross-
border payments, roughly about 25% of global GDP. They estimate
a wholesale CBDC network could save $100 billion a year,
reducing the transaction costs from $120 billion to facilitate
those cross-border payments to about $20 billion.\2\
---------------------------------------------------------------------------
\2\Oliver Wyman, Unlocking $120 Billion Value In Cross-border
Payments (Nov. 2021).
---------------------------------------------------------------------------
Furthermore, H.R. 1919 would effectively prohibit the
issuance of a CBDC in the U.S. before the U.S. has even had a
chance to fully explore the benefits, challenges, and design
options. As of April 2025, there are 134 countries and currency
unions, representing 98% of global GDP, that are exploring a
CBDC, which is up from 35 countries in May 2020.\3\ As other
countries race ahead and compete to develop and implement CBDCs
to harness what could prove to be critical in the evolving
global financial landscape, this bill would keep the U.S.
behind the starting line.
---------------------------------------------------------------------------
\3\Atlantic Council, Central Bank Digital Currency Tracker
(accessed March 5, 2025).
---------------------------------------------------------------------------
To the extent that cryptocurrencies offer certain benefits,
a CBDC could also offer those same benefits while having a
greater potential to gain broad public trust and utilization
(especially after numerous digital assets have been used to
defraud Americans), overcome challenges with regard to
interchangeability, avoid volatility in value, and prioritize
financial inclusion and consumer protection. CBDCs may also
have the potential to provide faster payment transactions and
lower transaction fees for consumers and small businesses.
During the 118th Congress in a March 2023 full Committee
hearing, when asked whether the Fed would need Congressional
authorization to issue a CBDC, Fed Chair Jerome Powell
distinguished between retail and wholesale CBDCs.\4\ He stated,
``we've always been talking about retail CBDC and [that's]
something we would certainly need congressional approval for''
yet potential forms of wholesale CBDCs would be ``less
clear.''\5\ Around this time, Rep. Emmer introduced H.R. 5403--
an earlier version of this bill (H.R. 1919). H.R. 5403 passed
the House last Congress by a vote of 216-192.
---------------------------------------------------------------------------
\4\House Committee on Financial Services, The Federal Reserve's
Semi-Annual Monetary Policy Report, 118th Cong. (March 8, 2023).
\5\House Committee on Financial Services, The Federal Reserve's
Semi-Annual Monetary Policy Report, 118th Cong. (March 8, 2023).
---------------------------------------------------------------------------
Shortly after being inaugurated, on January 23rd President
Trump issued an executive order on digital assets (EO).\6\ This
EO prohibits CBDCs, including a restriction on any agency
activity related to the creation of CBDCs. The EO utilizes
similar language to the version of this bill from the 118th
Congress.\7\ The EO bans any ``form of digital money or
monetary value, denominated in the national unit of account,
that is a direct liability of the central bank.''\8\ When read
broadly, this could have sweeping ramifications for existing
Fed programs, like FedNow.
---------------------------------------------------------------------------
\6\White House, Strengthening American Leadership In Digital
Financial Technology (Jan. 23, 2025).
\7\Rep. Emmer, H.R. 5403--CBDC Anti-Surveillance State Act
(accessed Feb. 10, 2025).
\8\
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H.R. 1919 is opposed by the following groups: Public
Citizen, Americas for Financial Reform, Raul Carrillo (Academic
Fellow, Columbia Law School), Rohan Grey (Assistant Professor
of Law, Willamette University College of Law).
For these reasons, we oppose H.R. 1919.
Sincerely,
Maxine Waters,
Ranking Member.
Nydia M. Velazquez,
Brad Sherman,
David Scott,
Stephen F. Lynch,
Al Green,
Emanuel Cleaver, II,
Bill Foster,
Joyce Beatty,
Juan Vargas,
Ayanna Pressley,
Rashida Tlaib,
Sylvia R. Garcia,
Nikema Williams,
Members of Congress.
[all]