Ted Cruz, a Republican senator from Texas, has introduced a new legislation that aims to prohibit the US government from creating or issuing any form of central bank digital currency (CBDC). He argues that CBDCs will pose a threat to the privacy, security, and freedom of Americans, and could also “choke out politically unpopular activity.”
CBDCs are essentially digital tokens that represent a claim on the central bank, and that can be used for payments and transfers through digital wallets or platforms.
The legislation, known as the “Central Bank Digital Currency (CBDC) Anti-Surveillance State Act”, received support from four additional Republican senators, namely Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun.
This Anti-Surveillance State Act “would prohibit the Federal Reserve from issuing a CBDC directly to anyone,” therefore, impeding them from evolving into a retail bank. The bill will also prevent them from “issuing a CBDC indirectly to individuals through financial institutions or other third parties, as well as prevent the Federal Reserve from using a CBDC as a tool to implement monetary policy and control the economy.”
In a statement Ted Cruz briefly explained that,
“The Biden administration salivates at the thought of infringing on our freedom and intruding on the privacy of citizens to surveil their personal spending habits, which is why Congress must clarify that the Federal Reserve has no authority to implement a CBDC. I’m proud to lead the fight in the Senate to restrict the Federal Reserve’s exploration of and attempt to introduce a CBDC to the American economy.”
The legislation has received the endorsement of several prominent organizations, including Heritage Action for America (HAFA), the Blockchain Association, the American Bankers Association (ABA), the Independent Community Bankers Association (ICBA), and Club for Growth (CFG).
In the combined statement released by the office of each senator, Heritage Action for America said that they “will be issuing a Key Vote Cosponsorship to encourage support for Senator Cruz and Whip Emmer’s bill—the Anti-Surveillance State Act—and will include cosponsorship on our legislative scorecard.”