Five U.S. senators have united to oppose the Biden administration’s proposal to introduce a “digital dollar” by introducing legislation that calls for a ban on central bank digital currencies (CBDCs).
Introduced on February 26 by Senators Ted Cruz, Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun, the CBDC Anti-Surveillance State Act challenges the authority of the Federal Reserve to implement a CBDC. The senators express concerns that a CBDC could be used for citizen surveillance and pose a threat to freedom.
Senator Cruz has urged Congress to clarify that the Federal Reserve lacks the authority to roll out a CBDC. The bill aims to restrict the Federal Reserve’s ability “to offer certain products or services directly to an individual” and prevent the use of CBDCs for monetary policy.
Senators Scott and Budd emphasize the importance of safeguarding the financial privacy of Americans, arguing that a CBDC could enable extensive government surveillance and control over spending habits.
Describing CBDC as “government-controlled programmable money,” Senator Cruz’s announcement warns of its potential to collect sensitive personal data and exercise arbitrary fund tracking and freezing powers.
If enacted, the legislation would mandate congressional authorization for any future CBDC issuance, ensuring that the Federal Reserve cannot function as a retail bank.
The legislation 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.
Meanwhile, former President Donald Trump, a 2024 presidential election candidate, has pledged to oppose the development of an in-house CBDC, citing concerns raised by Vivek Ramaswamy about the adverse effects of CBDCs.