HR 5403 — CBDC Anti-Surveillance State Act

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

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 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 Federal reserve bank shall not--
 (A) offer products or services directly to an 
 individual;
 (B) maintain an account on behalf of an 
 individual; or
 (C) issue a central bank digital currency, or 
 any digital asset that is substantially similar 
 under any other name or label, directly to an 
 individual.
 (19)(A) A Federal reserve bank shall 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) Subparagraph (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.
 (20) Prohibition on the use of central bank digital 
 currency for monetary policy.--The Board of Governors 
 of the Federal Reserve System and the Federal Open 
 Market Committee shall not use any central bank digital 
 currency, or any digital asset that is substantially 
 similar under any other name or label, to implement 
 monetary policy.

SEC. 16A. CENTRAL BANK DIGITAL CURRENCY.

 (a) In General.--The Board of Governors of the Federal 
Reserve System may not, absent Congressional authorization, 
issue a central bank digital currency.
 (b) Central Bank Digital Currency Defined.--In this section, 
the term ``central bank digital currency'' means a form of 
digital money or monetary value, denominated in the national 
unit of account, that is a direct liability of the Federal 
Reserve System.

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 TITLE 31, UNITED STATES CODE

SUBTITLE I--GENERAL

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 CHAPTER 3--DEPARTMENT OF THE TREASURY

SUBCHAPTER I--ORGANIZATION

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SEC. 317. CENTRAL BANK DIGITAL CURRENCY.

 (a) In General.--The Secretary of the Treasury may not, 
absent Congressional authorization, direct the Board of 
Governors of the Federal Reserve System to issue a central bank 
digital currency.
 (b) Central Bank Digital Currency Defined.--In this section, 
the term ``central bank digital currency'' means a form of 
digital money or monetary value, denominated in the national 
unit of account, that is a direct liability of the central 
bank.

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