The development of the digital US dollar faces another obstacle as Senator Ted Cruz targets US CBDC with a new bill.
According to Fox Business, Senator Ted Cruz introduced the bill prohibiting the Federal Reserve from developing a "direct-to-consumer" central bank digital currency (CBDC), citing security and financial privacy concerns. He added that the United States’ digital currency policy must ensure the dollar retains dominance.
In his statement, Cruz emphasized that CBDCs issued by the Federal Reserve would be exploited for surveillance to collect users’ personal information and track their transactions. Furthermore, Senator Cruz stressed potential security risks and vulnerabilities to cyber-attacks as CBDCs are centralized.
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While introducing the bill, Cruz stated that the Fed “has no authority to unilaterally establish a central bank currency,” adding that it should keep away from attempts to control cryptocurrency.
Cruz’s bill is cosponsored by fellow Republican Senators Mike Braun and Chuck Grassley. This is the second bill by the senators after they launched a similar document in March 2022, which did not progress beyond the introduction phase.
The bill to prohibit the launch of CBDC follows significant strides made in developing a US-based CBDC. In November 2022, the Federal Reserve Bank of New York and top financial sector players, such as HSBC, BNY Mellon, and Wells Fargo, launched a pilot program.
Notably, Sen. Braun and Sen. Grassley highlighted financial privacy concerns in their supporting statements for the bill, calling the concept of CBDCs “simply a bad idea.”
Other leaders in the US have launched similar bills, including Florida Governor Ron DeSantis and US Congressman Tom Emmer. The latter US Congressman criticized CBDCs, claiming that the introduction of the US central bank digital currency (CBDC) could expose citizens to privacy risks.