A group of Senate Republicans, led by Senator Ted Cruz of Texas, is taking legislative steps to restrict the Fed’s capacity to introduce a central bank digital currency (CBDC), spotlighting the issue as a potential focal point in the 2024 presidential campaign discussions.
The legislative effort reflects broader concerns over privacy and the role of government in financial transactions, Fox Business reported Feb. 26.
Cruz has been a vocal critic of CBDCs and a proponent of Bitcoin for a number of years. His pro-crypto stance is a major part of his political agenda.
Anti-Surveillance Act
The proposed bill, named the Central Bank Digital Currency Anti-Surveillance State Act, is co-sponsored by Senators Bill Hagerty (R-Tenn.), Rick Scott (R-Fla.), Ted Budd (R-N.C.), Mike Braun (R-Ind.), and Kevin Cramer (R-N.D.).
It primarily argues that the Fed should not issue a CBDC to Americans without obtaining explicit consent from Congress due to concerns that it could be used to violate the rights of US citizens.
According to Cruz:
“The Biden administration salivates at the prospect of emulating China’s use of CBDCs, infringing on our freedom and intruding on the privacy of citizens to surveil their personal spending habits, which is why Congress must clarify that the Federal Reserve has no authority to implement a CBDC.”
The move comes amid debates over the potential for government overreach through the use of digital currency technologies.
Critics, including the bill’s sponsors, worry that a CBDC could enable the federal government to monitor individuals’ financial activities more closely and possibly restrict access to funds.
Key concern for White House hopefuls
The Biden administration has sanctioned the Fed to explore the development of a CBDC, aiming to make financial transactions more accessible and cost-effective for Americans.
However, the notion of a digital dollar has sparked fears among conservatives and privacy advocates, who see it as a gateway to unprecedented government surveillance and economic control.
This legislative push by GOP senators aligns with the stance of former President Donald Trump and other Republican figures, who have voiced strong opposition to the concept of a digital dollar.
Trump, in particular, has labeled the potential implementation of a CBDC as “very dangerous,” suggesting it could lead to the arbitrary disappearance of funds from individual bank accounts.
Meanwhile, Democrat-turned-Independent Robert F. Kennedy Jr., a White House hopeful, has also criticized CBDCs as detrimental to human and civil rights, pledging to halt any progress toward establishing such a currency in the US.
As the Fed continues its research into the feasibility and implications of a CBDC, the forthcoming legislation and political discourse surrounding digital currencies promise to keep this issue at the forefront of national policy debates, especially as the 2024 presidential election draws near.
