In March 2024, Indiana Governor Eric J. Holcomb signed bipartisan legislation blocking any efforts by the Federal Reserve to adopt central bank digital currency (CBDC) in the United States. The legislation was spearheaded by Senator Eric Koch and Representative Kyle Pierce.

Indiana SB 180 expressly prohibits state government agencies from accepting payments made with CBDC or requiring payment with CBDC for government services. The common-sense bill passed unanimously in the Indiana Senate and received broad support in the House of Representatives on a vote of 83-11.

A central bank digital currency — as the name suggests — would equip government agencies with unprecedented, centralized, complete control over a country’s currency and financial transactions. Importantly, CBDCs are not like private, decentralized forms of cryptocurrency like Bitcoin or Ethereum that operate independently of any government.

President Biden’s Treasury Department is exploring the possibility of implementing CBDC in the United States. While proponents often tout the theoretical benefits of CBDCs for curbing financial crime, it would result in a massive trade-off for financial privacy and expose Americans to unprecedented risks of government surveillance.

Fortunately, state and federal policymakers are pushing back against this misguided effort. Last year, ALEC members approved a new model policy — the Reject CBDCs and Protect Financial Privacy Act — that highlights the fundamental risks posed by CBDCs, and protects Americans’ financial privacy and our fundamentals of a free market economy. Emphasizes the need to uphold principles. . This model policy is featured in ALEC. Policy solutions needed for 2024.

As the Consumer Choice Center noted, CBDCs that are regulated by a country’s central bank, such as the Fed, give governments unfettered power to target businesses, organizations and individuals by monitoring every financial transaction in the country. allow Authoritarian regimes such as the People’s Republic of China have leveraged CBDCs to monitor individual consumer transactions and maintain social credit score systems.

Following Indiana’s lead, the US House of Representatives just last month advanced the CBDC Anti-Surveillance Act, which would prohibit the Fed from directly or indirectly issuing CBDC in the United States.

ALEC Senator Eric Koch (who currently serves as Public Sector Chair of ALEC’s Communications and Technology Task Force), Representative Kyle Pearce, and SB 180 co-sponsors Hoosiers from government oversight of their financial transactions. Appreciates their success and dedication to protecting Congratulations!

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