In today’s economy, much of our economic activity is online. Payments are increasingly being sent via online banking and with mobile payment apps such as Venmo and PayPal.  While we may feel like these new tools are helping us make gains in the areas of convenience and speed, the existence of this online record has led some in government to push for increased control and monitoring of our financial transactions. This should scare every single American.   

Last year, House Democrats introduced legislation requiring financial institutions provide the IRS with information on accounts with more than $600 in transactions per year. Recognizing the privacy and compliance implications that come with such a ludicrous proposal, I led a letter with 142 of my colleagues objecting to this extreme invasion of Americans' financial privacy.

As a result, the Biden Administration proposed raising the reporting requirement to $10,000 in transactions per year. The authors of this proposal refused to acknowledge that even this modified proposal would still impact nearly every single American. Fortunately, after leading a second letter with more than 200 Members of Congress joining in, the updated reporting thresholds were completely struck from the legislation.

The Department of Treasury and some of my fellow legislators in Congress claim these provisions were aimed at “closing the tax gap.” We all know, however, that the IRS can barely protect and process the data it has under its control today. This new proposal was nothing more than yet another opportunity for the federal government to gain more insight into the financial transactions of every single American.

Another proposal that is equally as concerning is the Federal Reserve and Treasury Department’s work to study the “benefits” of a federally controlled, Central Bank Digital Currency (CBDC). These CBDCs are digital currencies issued and backed by a government entity like the Fed which are centralized, controlled, and transacted on a permissioned blockchain.

As someone who believes strongly in the promise that blockchain and cryptocurrency hold for the future of finance, any Central Bank Digital Currency must be open, permissionless, and private. Any CBDC that fails to embody those three core principles will give central banks control over an individual’s payment and financial activity, as well as the ability to monitor all transactions taking place on the blockchain.

Permissioned CBDCs have already been introduced in countries like China and are currently being used to monitor and curtail the purchasing trends and behaviors of their citizens. This is not an Orwellian fiction; this is real, and it is happening today. To ensure this never happens in the United States, I have introduced legislation prohibiting the Federal Reserve from issuing a CBDC directly to individuals.

A recent study from the CATO Institute found that 79% of Americans find it “unreasonable” for banks to share what you buy with the government, and I completely agree. There is no reason for the federal government to monitor law-abiding Americans’ purchases. Without financial privacy, there is no privacy.