In a significant challenge to the Biden administration's plans to introduce a digital dollar, five U.S. senators have proposed legislation to ban Central Bank Digital Currencies (CBDCs). The move questions the Federal Reserve's plan for digital dollar issuance, citing concerns over citizen surveillance and freedom infringement.
Opposition to CBDC
Senators Ted Cruz, Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun co-signed the "CBDC Anti-Surveillance State Act" on Feb. 26, aiming to restrict the Federal Reserve's ability to launch a CBDC. They argue that a government-controlled digital dollar could lead to unprecedented surveillance over American citizens, compromising financial privacy and autonomy.
Legislative Efforts
The proposed bill seeks to clarify that the Federal Reserve lacks the authority to issue a CBDC directly to individuals or use it for monetary policy purposes. Senator Cruz emphasized the need to protect citizens from potential government overreach into personal spending habits, supported by Senators Scott and Budd, who stressed the importance of financial privacy.
Potential Consequences
If passed, this legislation would require congressional approval for any future CBDC issuance, effectively preventing the Federal Reserve from acting as a retail bank. The bill has garnered support from various associations, including Heritage Action for America, the Blockchain Association, and the American Bankers Association, highlighting widespread concern over CBDC implications.
Political Landscape
The opposition to CBDCs also resonates with former President Donald Trump, who has publicly vowed to oppose the creation of a government-controlled digital currency, citing concerns over its impact on privacy and freedom.
