Senator Ted Cruz, along with co-sponsors Senators Braun and Grassley, has introduced legislation that prohibits the Federal Reserve from developing a direct-to-consumer central bank digital currency (CBDC) that could be used as a financial surveillance tool by the federal government.
The proposed bill aims to maintain the dominance of the US dollar and protect financial privacy while allowing the private sector to innovate.
CBDCs could enable the Federal Reserve to mobilize itself into a retail bank, collect personally identifiable information on users, and track their transactions indefinitely.
Unlike decentralized digital currencies like Bitcoin, CBDCs are issued and backed by a government entity and transact on a centralized, permissioned blockchain.
Cruz on protecting financial privacy
The legislation is a move to protect financial privacy, particularly in light of the development of CBDCs in other countries, such as China. Cruz argues that CBDCs could leave Americans’ financial information vulnerable to attack and be used as a direct surveillance tool into the private transactions of Americans.
The bill aims to ensure that the federal government does not have the authority to establish a central bank currency and prevent it from attempting to centralize or control cryptocurrency, allowing it to thrive in the United States. The Senator believes that the government should empower entrepreneurs, enable innovation and increase individual freedom, not stifle it.
Maintaining the dollar’s dominance
Cruz’s proposed bill also aims to maintain the dominance of the US dollar, as CBDCs could potentially compete with private cryptocurrencies, threatening the dollar’s position as the world’s reserve currency.
The legislation aims to ensure that the US dollar remains the dominant currency in the world and prevent other countries from using CBDCs to challenge the dollar’s supremacy.
The bill is not the first time that Cruz has attempted to block the development of a CBDC. He previously introduced similar legislation in 2022.
The proposed bill is part of a wider effort by some US lawmakers to regulate the crypto industry and maintain the government’s control over the financial system.
The proposed legislation faces an uphill battle in Congress, particularly with the Democratic Party controlling both houses of Congress and the White House.
Regardless, it is an important step towards protecting financial privacy and maintaining the dominance of the US dollar in the global financial system.
While CBDCs have the potential to transform the global financial system, it is important that they are developed in a way that protects financial privacy and maintains the dominance of the US dollar.
Senator Ted Cruz’s proposed legislation is an important step towards achieving these goals and ensuring that the government does not overreach its authority in the development of CBDCs.
