Regulation
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Republican U.S. Senator Ted Cruz (D-Tex.) has introduced a bill to prevent the Federal Reserve System (FRS) from launching a consumer-facing central bank digital currency (CBDC). In a statement dated March 21, 2023, the politician assured: he presented the idea of a law to prevent a federal organization from developing a retail version of the CBDC. According to him, “it can be used by the government as an instrument of financial supervision.”
Cruz said it’s “more important than ever” to ensure that U.S. digital currency policy protects “financial privacy, upholds the dominance of the U.S. dollar, and cultivates innovation.” He added that CBDCs that do not adhere to these core principles could allow an organization like the Federal Reserve to collect personal information about users and track their transactions.
Cruz emphasized that the federal government “does not have the authority to unilaterally create a CBDC. “We must empower entrepreneurs, promote innovation, and expand individual freedom, not stifle it,” the Republican said.
Cruz’s anti-CBDC bill was supported by Republican Senators Mike Brown of Indiana and Chuck Grassley of Iowa. In their statements, both expressed confidence that the CBDC would be used as a population monitoring tool. They noted that the state must give guarantees that it will not “spy” on the finances of hardworking Americans.
Grassley emphasized that “U.S. citizens should be able to spend their money however they want. The government should not be able to track every transaction.”
The anti-CBDC bill is the second attempt by Cruz, Brown and Grassley to push the initiative forward. Previously, on March 30, 2022, they had already submitted a similar bill to prevent the Fed from issuing CBDCs directly to individuals. However, after almost a year, he still hasn’t progressed past the application stage.
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