In Washington, D.C., Senator Ted Cruz introduced a new bill to block the development and issuance of central bank digital currency (CBDC) in the United States.
The proposed legislation seeks to prohibit the Federal Reserve from creating its own CBDC or supporting the development of any digital currency. The idea is to preserve the privacy of crypto investors throughout the country.
Ted Cruz Introduces CBDC Bill
This is not the first time Senator Cruz has attempted to block CBDCs. He previously introduced similar legislation in 2022 but failed to gain traction in Congress. However, with the increasing interest in CBDCs from central banks worldwide, including the Federal Reserve, Senator Cruz is renewing his efforts to prevent their implementation in the U.S.
In the latest bill, Cruz noted that these CBDCs would enable the federal government to conduct undisrupted investor surveillance. He added that the digital asset policy in the United States is supposed to protect the financial privacy of investors, cultivate innovation, and maintain the dollar’s dominance.
However, CBDCs have failed to meet the requirements of these basic principles. As such, letting entities like the Federal Reserve create these digital currencies gives them access to users’ personal information while tracking their transactions.
Based on his perspective, the move of the Federal Reserve could result in potential risks. It could also harm the U.S. financial system and the broader economy.
Sen. Cruz believes that creating a digital dollar could threaten the stability of the traditional banking system, increase the risk of cyber-attacks, and potentially lead to inflation. On March 22, 2023, he tweeted that the Federal Reserve has no authority to develop a CBDC.
Sen. Cruz Gets Support From Other Senators
The bill has already attracted support from other lawmakers in Congress, including Senators Braun and Grassley. In a statement, Braun noted that giving the government the right to increase financial activity surveillance and centralize the financial information of Americans is a bad idea.
In another statement from the report, Grassley cited that every American has the right to spend their funds how they want to. They don’t need the government to track their funds and decisions.
The fate of the Digital Asset Market Structure and Investor Protection Act remains uncertain, as it will need to go through the legislative process and gain support from a majority of lawmakers in both the Senate and House of Representatives to become law.
Featured image from Pixabay and chart from Tradingview.com