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A group of five United States senators has taken significant action against the proposal of a digital dollar by introducing a bill aimed at prohibiting the issuance of central bank digital currencies (CBDCs).
Senators Ted Cruz (R-TX), Bill Hagerty (R-TN), Rick Scott (R-FL), Ted Budd (R-NC), and Mike Braun (R-IN) collectively introduced the Central Bank Digital Currency (CBDC) Anti-Surveillance State Act on February 26. This legislation challenges the Federal Reserve’s authority to introduce a CBDC, expressing concerns over potential surveillance and privacy infringement.
The senators argue that the Biden administration’s pursuit of a CBDC could lead to excessive government surveillance, thereby infringing on American citizens’ freedoms. Senator Hagerty criticized government efforts to exploit the financial system for political ends, suggesting that a CBDC could become another tool for such exploitation. Senator Cruz emphasized the importance of congressional clarity regarding the Federal Reserve’s lack of authority to implement a CBDC, citing concerns over privacy and freedom infringement.
The proposed bill aims to restrict the Federal Reserve’s ability to issue a CBDC directly to individuals or indirectly through financial institutions. It seeks to prevent the Federal Reserve from utilizing a CBDC to influence monetary policy or the economy. Additionally, the legislation would require explicit authorization from Congress for any future issuance of a CBDC.
Further, highlighting the risks to financial privacy, Senator Budd articulated the stakes involved, stating:
“A CBDC would open the door for the federal government to surveil and control the spending habits of all Americans. Any push to establish a CBDC must be confronted and stopped, and that’s why I’m proud to join Senator Cruz’s effort to do just that.”
The initiative has garnered support from five associations, including Heritage Action for America, the Blockchain Association, the American Bankers Association, the Independent Community Bankers Association, and the Club for Growth. This support reflects a broader concern among various stakeholders about the potential implications of a CBDC on privacy and governmental power.
In a broader context, opposition to CBDCs is not limited to current senators. Former President Donald Trump and presidential candidate Robert F. Kennedy Jr. have both expressed their concerns. Trump has pledged to oppose the creation of a CBDC if re-elected, citing it as a threat to freedom. Kennedy highlighted the potential for a CBDC to enable government surveillance and control over individual transactions, drawing parallels with China’s digital yuan and its associated social credit system.