Senator Ted Cruz has proposed a new bill to prevent the United States Federal Reserve from introducing a CBDC for direct consumer use. Per Cruz’s statement, the bill would inhibit the development of a retail CBDC by the Fed.
Besides, Cruz expressed concerns that the federal government could use such a currency for financial surveillance purposes.
Federal Gov Has No Power To Launch A CBDC Solely — Cruz
Cruz emphasized safeguarding financial privacy, preserving the dollar’s dominance, and promoting innovation in US digital currency policy. He stated that these principles are now more critical than ever.
In addition, he cautioned that CBDCs which do not conform to these fundamental principles could allow the Federal Reserve to become a retail bank. This would allow the bank to gather users’ data and monitor their transactions without restrictions.
According to Cruz, the federal administration lacks the power to create a CBDC independently. He stressed the need to promote entrepreneurship, facilitate innovation, and expand personal liberty rather than hinder them.
Meanwhile, other Republican senators have shown support for the bill. These include Senators Chuck Grassley of Iowa and Mike Braun of Indiana. They stated that they are concerned that a CBDC could be employed as a mechanism for surveillance.
Also read:If the bill is enacted, Grassley affirmed that it would stop the government from prying into the financial affairs of its citizens. He added that Americans should be free to use their money as they see fit, without fear of the government monitoring every transaction.
Florida Governor Calls For Ban On Digital Dollar
Cruz, Grassley, and Braun’s latest proposal is a second attempt at banning CBDC. They introduced a similar bill on March 30th, 2022, to prevent the Fed from directly issuing CBDCs to individuals.
Nevertheless, almost a year later, the bill has yet to progress beyond the introductory phase. Meanwhile, CBDC development in the US is rising gradually. Last March, President Joe Biden’s signed an executive order which has enabled substantial advancements in developing a USD CBDC.
In November, the New York Fed and major financial institutions such as Citi, BNY Mellon, Wells Fargo, and HSBC joined a 12-week CBDC pilot program with SWIFT and Mastercard.
Meanwhile, Cruz, Grassley, and Braun are not the only policymakers seeking to eliminate CBDCs. Earlier in the week, Ron DeSantis, Florida’s Governor, urged state legislators to propose a bill prohibiting a digital dollar.
Drawing a parallel between China’s digital Yuan and the digital dollar, DeSantis stated that China had used the e-CNY to monitor the conduct of citizens extensively. He added that the Chinese government would employ any means necessary to achieve its goals.
Thus, the governor argued that the digital dollar aims to monitor and manipulate the behavior of Americans.
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