Senator Ted Cruz (R-TX) on Tuesday unveiled legislation that would forbid the Biden administration and the Federal Reserve from launching a central bank digital currency.
The asset, that would be controlled by the Federal Reserve and tied to the dollar’s value, is cited by those who are opposed to a prospective central bank digital currency as having the potential to strengthen government control and surveillance over ordinary people. Cruz, Senator Mike Braun (R-IN), Senator Chuck Grassley (R-IA), and others have proposed legislation that would forbid the implementation of the technology by those in charge of monetary policy.
Cruz stated in a news statement that “the federal gov’t has no jurisdiction to unilaterally adopt a central bank currency. This bill makes a significant contribution to ensuring that big government does not try to centralize or control Bitcoin and instead lets it flourish in the U.S. Instead of suppressing it, we ought to encourage innovation, empower entrepreneurs, and increase personal freedom.”
Cruz pointed out that, should authorities establish a central bank digital currency, then the Federal Reserve would be able to effectively establish itself as a banking institution and oversee all American transactions. He claimed that the nation will become more vulnerable to cyberattacks and the ensuing economic disruption as a result of the concentration of financial information.
According to an Atlantic Council report, countries like Australia, China, India, Russia, Japan, and South Korea are looking into central bank digital currencies, which are already legal tender in the Bahamas, Jamaica, and Nigeria. According to topline poll results from the Cato Institute that was shared last week with The Daily Wire, significant majorities as well as supermajorities of Americans are against the implementation of a central bank digital currency, and even more so if the technology caused the end of physical cash or allowed the government to oversee financial transactions.
In addition to launching a “whole-of-government strategy to addressing the risks and leveraging the possible benefits of digital assets and their underlying technologies,” President Joseph Biden has backed the study of a prospective central bank digital currency. Recently the Federal Reserve performed a simulation with Mastercard, Citi, BNY Mellon, as well as other corporations to establish the “feasibility of transactions across financial institutions” when using the central bank digital currencies.
In the press release, Grassley said, “The American people should be allowed to use their money however they wish without having to worry about the risk of every transaction being monitored by the government.” Braun continued, “Allowing the government to consolidate American financial data and expand surveillance of American financial activity is just a poor idea.”
The primary issue of those who are opposed to central bank digital currencies is the intrusion on financial freedoms by government actors. They point out that similar limitations on private business have already happened in response to political expression. Last year, Justin Trudeau, the Canadian Prime Minister, used emergency powers to freeze the personal and business accounts of anybody engaging in protests against the country’s vaccination requirements.
Digital currencies issued by central banks could become a subject of dispute in the upcoming GOP presidential primary. Every Republican candidate has been urged to criticize the digital assets by an asset management CEO, Vivek Ramaswamy who is a former pharmacy entrepreneur and is pursuing an issues-based campaign. While Governor Kristi Noem (R-SD) vetoed measures that would have classed the asset as money in South Dakota, Governor Ron DeSantis (R-FL) launched a proposal this week to forbid the use of central bank digital currencies in Florida and urged other states to do the same. DeSantis and Noem have not made a formal announcement on their campaign for the Republican nomination.