Central Bank Digital Currency

Floor Speech

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Mr. AUCHINCLOSS. Mr. Speaker, recently the United States has considered issuing a central bank digital currency. CBDCs are digital liabilities 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 a US 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 I, Section 8 of the Constitution grants that power ``to coin money'' and ``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 dies'' 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 of 2022 and said that it would not issue a CBDC without ``clear support'' from Congress ``in the form of a specific authorizing law.'' Fed Chair Jerome Powell has personally affirmed that view on multiple occasions since that 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 understands that it cannot issue a CBDC without authorization from Congress, some commentators continue 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.

Mr. Speaker, 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.

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Mr. AUCHINCLOSS. Mr. Speaker, I thank Representative Hill for his partnership and leadership on this subject.

The benefits that the United States enjoys due to the dollar's global reserve status have been called an exorbitant privilege, but that privilege rests in part upon scrupulous observance of the rule of law and how we regulate our currency.

The Power to Mint Act reinforces the rule of law by emphasizing Congress' authority to control the future of the dollar.

Mr. Speaker, I urge my colleagues to cosponsor my bill and keep the power to authorize new currency with Congress.

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