Republican Senator Ted Cruz has introduced a bill that would prohibit the use and development of a Central Bank Digital Currency (CBDC) in the US.
Cruz intends to block the Federal Reserve’s and Biden Administration’s premature plans to develop a CBDC as he and the party are concerned that such digital currency would be an attempt to not “control cryptocurrency” but allow it to “thrive” in the US.
President Biden signed an executive order for the exploration into a CBDC to commence and according to former US Deputy Security Advisor Daleep Singh, the investigation into a digital dollar was well underway.
Such plans have since halted – in comparison to many countries who are advancing in their CBDC project – with many opposing the introduction of a dollar-pegged cryptocurrency, in particular Federal Reserve Board Member, Christopher Waller, and now Cruz has put those scepticisms into action with this latest bill.
“The federal government has no authority to unilaterally establish a central bank currency,” Cruz said.
“The bill goes a long way in making sure big government doesn’t attempt to centralise or control cryptocurrency and instead, allows it to thrive in the United States. We should be empowering entrepreneurs, enabling innovation, and increasing individual freedom, not stifling it.”
One of the main cruxes of Cruz’s opposition to a US CBDC is that it can be traced and tracked quite seamlessly, posing a potential threat to national privacy and security. The Republican Senator also believes this digital currency is vulnerable to hacks and cyberattacks.
Alongside Cruz, Republican Senators for Indiana and Iowa, Mike Braun and Chuck Grassley respectively, have also backed the bill, with Braun outlining that a digital dollar’s potential to survey Americans’ financial activity as a “bad idea”.
He continued: “Allowing the government to centralise Americans’ financial information and increase surveillance of Americans’ financial activity is simply a bad idea.
“The federal government should not have even more control over your own money. I support this legislation to allow entrepreneurship to prosper and keep the federal government from further encroaching on your privacy rights.”
It is unclear whether this bill will pass through US Congress or is universally agreed upon in the Republican party, but it has highlighted the Biden Administration’s and Federal Reserve’s efforts to lift a CBDC project off the ground.
A group composed of Mastercard, SWIFT, HSBC and more, worked alongside the Federal Reserve Bank of New York as a part of a 12-week CBDC programme that ran from November 2022 onwards, which the New York Fed described as a testing programme to test the feasibility of releasing a direct-to-consumer digital currency.
What is clear in the US’ attempts to look into a CBDC is that they’re falling vastly behind other major countries who are already launching pilot programmes of their digital currencies, such as Russia and India.
