Texas senator Ted Cruz and other Senate Republicans have confirmed that they do not support the United States Federal Reserve in its pursuit of the implementation of a Central Bank Digital Currency (CBDC). Cruz reiterated his stance by introducing a bill that restricts the Fed Reserve from embracing a direct-to-consumer CBDC. Senators Mike Braun and Chuck Grassley are also co-sponsors of the bill.
While speaking of the introduction of his bill, Crus said “The federal government has no authority to unilaterally establish a central bank currency. The 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. We should be empowering entrepreneurs, enabling innovation, and increasing individual freedom — not stifling it.”
The U.S. Federal Reserve began mulling plans to research a potential CBDC which will be a dollar-based cryptocurrency as far back as 2021.
Banks and other financial institutions expressed mixed feelings about the introduction of a CBDC. However, efforts intensified on its implementation after President Joe Biden issued an Executive Order in March 2022. This executive order included a regulatory framework for cryptocurrency plus CBDCs.
“What’s outlined in the framework is intended to ensure that, concerning the development of digital assets, America’s core democratic values are respected; consumers, investors, and businesses are protected; appropriate global financial system connectivity and platform and architecture interoperability are preserved; and the safety and soundness of the global financial system and international monetary system are maintained,” the U.S. Treasury detailed.
Senator Says CBDC Will Invade Citizens’ Privacy
Cruz, however, does not share the same sentiments with the U.S. Treasury Department.
He explains that the centralized nature of this potential government-created CBDC would make it susceptible to cyber attacks. The Commerce and Science Senator also suspects that it may take away privacy from American citizens as the CBDC could be used as a tool to monitor their confidential transactions.
Senator Braun believes that even the American government’s control over citizens’ information 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,” he added.
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