Financial Services and General Government Appropriations Act, 2024

Floor Speech

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Mr. DAVIDSON. Mr. Chairman, this amendment expands upon the base tax.

The base tax says that none of these funds may be used to establish a central bank digital currency. A central bank digital currency shouldn't be established. Establishing could mean that it has already been created and waiting in the wings just in case we need it.

For ``Star Wars'' fans, imagine if we let the empire build the Death Star, as long as they promise not to turn it on. Let's not do that.

Let's not build this thing in the first place. We shouldn't design it or develop it. It shouldn't exist. That is the point of this amendment. Stop wasting your time on something that the American people don't want and Congress hasn't authorized. I think the base tax sort of gets at that, but I wanted to expand upon that to be clear. We don't even want it to exist.

Why is this important?

On March 9 of 2022, the Biden administration released an executive order outlining the administration's approach to the risks stemming from digital assets and blockchain technology. This included a directive to explore a United States central bank digital currency.

On March 1, 2023, the Under Secretary for Domestic Finance Nellie Lang gave a speech focusing on the administration's efforts thus far to design and develop a central bank digital currency: `` . . . a CBDC would involve both a new form of central bank money and, potentially, a new set of payment rails. Both real time payment systems and CBDCs present opportunities to build a more efficient, competitive, and inclusive U.S. payment system.''

She announced the creation of the Treasury-led CBDC Working Group to complement the Fed's work on the U.S. CBDC.

These are excerpts from her speech.

Meanwhile, the Federal Reserve has made substantial steps toward developing a central bank digital currency, as well. They have done numerous research on projects on the design, but the San Francisco Fed is actually recruiting and hiring for a senior crypto architect of a central bank digital currency to develop a U.S. central bank digital currency.

Article I, Section 8 of the Constitution is clear. The authority for creating money rests with this body, and we clearly aren't authorizing that.

In testimony the chairman of the Federal Reserve has made it clear that they couldn't actually establish it without congressional authorization.

We want them to stop building it.

What is a central bank digital currency?

It is a corruption of the concept of money from its proper use as a store of value and a means of exchange into a tool for coercion and control.

The version that is being studied is the same version that the Chinese Communist Party is implementing in China, which is a centrally managed, centrally controlled database.

Now, I am not saying the United States would automatically do the same things China is doing with it, but it would have the same features where the central government actually sees every single transaction. There is no intermediary. In fact, the central government becomes the intermediary between the person and their own property. It would have a claim on it, but their claim would rest with the Federal Government.

We do not need that kind of money in the United States. We don't want that kind of money in the United States. It is Orwellian, and it is dystopian. Every dystopian future has some version of corrupted money where the money itself is used as a tool for coercion and control.

In fact, the Book of Revelation, what I consider Scripture, talks about this, and in our time we are seeing the technology that could do it. In over 100 countries this kind of design and development work is underway. The United States should not partake in it. It is always depicted as evil, and we should have no part in it.

Mr. Chair, I urge adoption of this amendment. To be very clear, not only do we not want it established, we do not want it to exist.

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Mr. DAVIDSON. Mr. Chairman, the gentleman's argument is not against the language of this text. The gentleman's argument is about studying something or researching it, and the clear language does not prohibit research or study. It does prevent designing or developing it. We don't want them to create it.

Research all you like, Mr. Chairman, understand how evil it is. I assure the gentleman I am actually an expert on this field, and I am on the authorizing committee. We have as a committee passed language that prohibits the use of a central bank digital currency by the United States of America.

So the appropriation is aligning with the work of our authorizing committee. This is not legislating or it wouldn't have been made in order. It is a simple prohibition of the use of funds to do certain activities.

We don't want them to create this. They can research, they can come and say: We have studied this, and we think there are some really interesting ideas, and here is a proposal for something that might exist someday.

Mr. Chairman, we simply don't want them to create it, and I yield back the balance of my time.

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Mr. DAVIDSON. Will the gentleman yield?

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Mr. DAVIDSON. The working group I think is within the purview of study and research. We just want to make sure that they don't cross the line into designing and developing, and it looks like they are starting to do that. We don't want them to create something and say: See, it already exists.

We didn't appropriate money for them to do that. We didn't tell them to create it. We just want to be more clear on what we want you to do. By all means, research.
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Mr. DAVIDSON. Mr. Chairman, we rightly recognize one of the chief rivals to the United States is China. Really, more specifically, the Chinese Communist Party that has a grip on power over the people of China, and one of the key tools for their power is their currency.

The amendment I am offering today would limit the Treasury's ability to go along with an organization we helped to create, the International Monetary Fund. The International Monetary Fund is supposed to support financial stability in the world. Part of the way they do that is with something called special drawing rights.

This is a basket of currencies that they extend to others, and they added the Chinese RMB. In 2016, they officially joined the IMF's elite basket of currencies, which determines the value of the IMF's Special Drawing Rights.

Special Drawing Rights are not only a reserve asset in central banks around the world, they also serve as a unit of account for the IMF.

The IMF's decision was something of a coup for Beijing as the RMB now sits in this exclusive club with only the dollar, the euro, the pound sterling, and the yen.

I believe the IMF's elevation of the RMB was premature at the time. China lacked rule of law, as it still does today. Nevertheless, the IMF thought validating Beijing anyway would somehow encourage their government to pursue reform and work within the international community.

None of this has come to pass, of course. China went on to assault Hong Kong's democracy. They have increased state control of their economy. They threaten Taiwan actively. They act as a lifeline to Putin's regime in Russia, and they are actively carrying out a genocide against Uyghurs in their own country.

Rather than look at these facts, the IMF chose last year to not only have the RMB in the Special Drawing Rights basket but to increase its weight from 10.92 percent to 12.28 percent, making it the third-most prominent currency in the basket behind the dollar and the euro.

Even leaving aside China's aggression at home and abroad, the IMF undertook this move despite China's lack of an independent central bank and a free-floating currency, as well as China's nontransparent policies for their exchange rate management.

I want to highlight this point. The CCP controls China's currency management and monetary policy, and the value and interest rates of the Special Drawing Rights are influenced by that now.

In turn, the Special Drawing Rights interest rate helps determine the borrowing costs for IMF member countries, and that rate should be based on transparent economic governance, not black box deliberations of the Chinese Communist Party.

Mr. Chairman, enough is enough. My amendment would prohibit the Treasury Secretary from supporting an increase in the RMB's weight in the Special Drawing Rights currency basket.

A similar initiative, the Chinese Currency Accountability Act, passed the Financial Services Committee unanimously in February. This amendment aligns our appropriations with our authorizing committee.

While I remain baffled as to why Treasury would have allowed the RMB to enter the Special Drawing Rights currency basket in the first place and certainly to increase its weight, we must prevent this bad situation from getting worse, and that is what this amendment does.

I urge all of our colleagues to support it, and I reserve the balance of my time.

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Mr. DAVIDSON. Mr. Chairman, I am pleased to receive the update that the administration doesn't anticipate changing it, but let's be clear.

That doesn't prohibit them having flexibility. They can actively work to decrease the weight of the RMB. They simply can't work to increase it. Since they say that is their stated policy goal, I think it provides them exactly what they need.

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Mr. DAVIDSON. Mr. Chairman, this is a commonsense amendment. It checks the power and growth of the influence of the Chinese Communist Party and their currency, the RMB. It should not grow in its influence. That is what this amendment could help accomplish.

I urge all our colleagues to support it, and I yield back the balance of my time.

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