Last Updated on 2 months by John Piper
A Republican senator introduced a bill to stop the Federal Reserve’s launch of a digital currency (CBDC), for retail banks in the United States.
This legislation seeks to protect financial privacy. Senator Ted Cruz claims that the federal government could use the blockchain-based currency as a tool to monitor financial transactions. The government could gather personally identifiable information about users. The bill aims to preserve the US dollar’s dominance and encourage innovation. Cruz claimed that CBDCs who fail to follow these principles could allow the Federal Reserve to mobilize itself into a bank retail, track user transactions indefinitely and collect personal data.
The federal government does not have the authority to create a central bank currency unilaterally.
Read about my new bill in @FoxBusiness: Ted Cruz introduces bill blocking Fed from adopting central bank digital currencyhttps://t.co/LoX3u41nA4
— Senator Ted Cruz (@SenTedCruz) March 21, 2023
Chuck Grassley and Mike Braun co-sponsored Cruz’s anti CBDC bill. They introduced a similar bill in March 2022. The bill would prohibit the Federal Reserve’s issuing CBDC directly to individuals. The introduction phase of the previous bill was not completed. It remains to be seen if the current bill will do better.
The United States is exploring CBDCs
Some politicians are concerned about the possibility that a CBDC could be used to monitor people. However, significant progress has been made in the development of a US-dollar CBDC. The Federal Reserve Bank of New York participated in a 12-week pilot program for digital dollars with Mastercard, SWIFT.
A digital currency could have many benefits, including greater financial inclusion and better payment efficiency. There are still concerns about potential risks and challenges such as financial instability, cybersecurity threats, and other issues.
Florida Governor Ron DeSantis called for state legislators to pass legislation banning digital dollars. He cited concerns about citizen behavior and surveillance. The debate about CBDCs in the US is a reminder of the importance of policymakers balancing the benefits and the challenges presented by these new technologies.
Coin Insider’s first article, The US Senator Attempts to Ban CBDC With New Legislation appeared first on Coin Insider.