- Senator Ted Cruz has proposed legislation to prevent the US Federal Reserve from introducing a CBDC that is “direct-to-consumer.”
- Assuring the protection of American citizens’ financial privacy is “more important than ever,” according to Ted Cruz.
Texas Senator Ted Cruz unveiled a measure on Tuesday, March 21, that would forbid the Federal Reserve from implementing a central bank digital currency (CBDC). Cruz stated when introducing the measure:
“The federal government has no authority to unilaterally establish a central bank currency. This bill goes a long way in making sure big government doesn’t attempt to centralize or control cryptocurrency and instead, allows it to thrive in the United States.”
The senator said that rather than “stifling it,” the government should “empower” business owners, facilitate invention, and promote individual freedom. Notably, Senators Mike Braun and Chuck Grassley are co-sponsors of the measure. The possibility of a CBDC is presently being investigated by the US federal government. President Biden signed an executive order containing this in March 2022.
Cruz clarified in a statement that, unlike decentralized digital assets like Bitcoin, which are issued and backed by a government organization and exchanged on a centralized blockchain, CBDCs do both. He continued by explaining why it would be harmful:
“Not only would this CBDC model centralize Americans’ financial information, leaving it vulnerable to attack, but it could also be used as a direct surveillance tool into the private transactions of Americans.”
Sen. Braun even went so far as to say that doing so “is simply a bad idea.” He continued by saying that you shouldn’t want the federal government to have even more power over personal finances. The senator emphasized that he favors this legislation in order to “encourage entrepreneurship” and prevent the federal government from violating people’s privacy rights.
In response to the most recent legislation, Grassley stated that every American should have the freedom to use their money as they, please. Without the potential of transaction monitoring, this should be done. Added the senator:
“our bill would ensure that no one is snooping on the finances of hardworking Americans.”
This is not the first occasion authorities have criticized the digital dollar. Ron DeSantis, governor of Florida, recently declared his support for legislation that would outlaw currencies managed by central banks. DeSantis clarified that he wanted to approve legislation that would outlaw the use of CBDC as currency in the state.
On February 22, US Congressman Tom Emmer proposed a similar anti-CBDC bill. The privacy issues regarding CBDCs were also raised by Emmer, who claimed that a programmable dollar could be “easily weaponized” as a surveillance tool to “choke out politically unpopular activity.”