Senate Republicans are pushing legislation to prevent the Federal Reserve and the Biden presidency from implementing a central bank digital currency (CBDC). Ted Cruz proposed this in an attempt to prevent the introduction of “direct-to-consumer” CBDC.
The Texas senator cautioned that the CBDC model may be used as a direct monitoring tool for people’s private transactions in addition to centralizing financial information.
Cruz argued while presenting the legislation that the federal government has the ability to either foster and nurture innovation in the crypto industry or absolutely destroy it. He commented:
“This bill goes a long way in making sure the big government doesn’t attempt to centralize and control cryptocurrency so that it can continue to thrive and prosper in the United States.”
According to the Republican, the bill’s goal is to keep the dollar’s dominance without competing with the private sector, and he believes it is crucial to underline that the Fed does not have, and should not have, the right to issue retail bank accounts.
“We should be empowering entrepreneurs, enabling innovation, and increasing individual freedom—not stifling it,” he stressed.
Sens. Ted Cruz, Braun (R-Ind.), and Grassley Push for Anti-CBDC
Per Sen. Cruz’s bill, which also has the support of Sens. Braun (Indiana) and Grassley (Iowa), the federal government does not have the right to “unilaterally” establish a central bank currency. They each voiced the opinion that a CBDC would be used as a tool for surveillance.
If the measure is enacted, it will ensure that the state is not “snooping” on the assets of hardworking Americans, according to Grassley.
They contend that the American people should have the freedom to spend their money however they see fit without worrying that the government could monitor each and every transaction.
Moreover, Ted Cruz thinks that central bank digital currencies (CBDCs) ought to uphold three fundamental principles: safeguarding financial privacy, maintaining the dominance of the dollar, and encouraging innovation.
As a result, CBDCs that disregard these standards could give the Federal Reserve the ability to transform into a retail bank, gather personally identifiable user information, and keep track of customers’ transactions indefinitely.
The anti-CBDC measure is Cruz, Braun, and Grassley’s follow-up to their March 30, 2022, introduction of a bill that would forbid the Fed from issuing a CBDC to an individual directly. Since then, there has been no legislation enacting this.
Although the Federal Reserve has not resolved whether to issue a CBDC, it released a study in January that examined several implications of a digital dollar.