Key takeaways:
- Five US senators have co-signed legislation calling for outlawing CBDCs to oppose the Biden administration’s ambitions to introduce a “digital dollar.”
- Senators Scott and Budd emphasised the importance of safeguarding US individuals’ financial privacy.
Five US senators have teamed up to co-sign legislation calling for outlawing central bank digital currencies (CBDCs) to oppose the Biden administration’s ambitions to introduce a “digital dollar.”
The CBDC Anti-Surveillance State Act was submitted on February 26 by US Senator Ted Cruz, along with Senators Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun. The bill challenges the Federal Reserve’s jurisdiction to enact a CBDC. The senators worry that the CBDC under the Biden administration will be set up to monitor people and restrict their freedom.
Senator Cruz requested clarification from Congress, stating that the Federal Reserve lacks the jurisdiction to enact a CBDC. The law expressly challenges the Federal Reserve’s right “to prohibit the use of central bank digital currency for monetary policy, and for other purposes,” as well as its ability “to offer certain products or services directly to an individual.”
Senators Scott and Budd emphasised the importance of safeguarding US individuals’ financial privacy. Budd continued, saying:
“A CBDC would open the door for the federal government to surveil and control the spending habits of all Americans. Any push to establish a CBDC must be confronted and stopped, and that’s why I’m proud to join Senator Cruz’s effort to do just that.”
According to Cruz’s announcement on the legislative filing, CBDC is “government-controlled programmable money” that can track and freeze payments for any reason and gather sensitive personal information about citizens.
In addition, if the bill is enacted into law, Congress would need to pass authorization legislation before any CBDCs may be issued in the future. The Federal Reserve would be prevented from acting as a retail bank thanks to it.
The bill has the backing of five associations in addition to five senators: the Club for Growth (CFG), the American Bankers Association (ABA), the Blockchain Association, the Independent Community Bankers Association (ICBA), and Heritage Action for America (HAFA).
Conversely, former President Donald Trump, a contender for the 2024 presidential election, has pledged to “never allow” the establishment of an internal CBDC. Vivek Ramaswamy was given credit by Trump for drawing attention to the drawbacks of CBDCs.
