Five U.S. senators have launched a legislative effort to stop the Federal Reserve from issuing a CBDC. The proposed bill, known as the Central Bank Digital Currency Anti-Surveillance State Act, was introduced on February 26 by Senators Ted Cruz from Texas, Bill Hagerty from Tennessee, Rick Scott from Florida, Ted Budd from North Carolina, and Mike Braun from Indiana. Their collective action signals a formidable challenge to the Federal Reserve’s authority in this domain.
The senators have voiced apprehension that the Biden administration’s interest in a CBDC might pave the way for government overreach, particularly in terms of monitoring American citizens’ financial activities. By pushing for this legislation, they aim to make it clear that the Federal Reserve should not proceed with a CBDC without explicit permission from Congress. The bill seeks to ensure that the Federal Reserve cannot issue a CBDC either directly to individuals or indirectly via banking institutions. Moreover, it is designed to prevent the central bank from using a CBDC to manipulate monetary policy or the broader economy.
Broad Support Against CBDCs Reflects Privacy Concerns
This legislative push has attracted backing from various associations, highlighting widespread worries about privacy and the expansion of governmental authority. Supporters include Heritage Action for America, the Blockchain Association, the American Bankers Association, the Independent Community Bankers Association, and the Club for Growth. Their endorsement of the bill reflects a shared apprehension regarding the implications of a CBDC for individual freedoms and privacy.
Criticism of CBDCs extends beyond the Senate. Notably, former President Donald Trump and presidential hopeful Robert F. Kennedy Jr. have both articulated their opposition. Trump has vowed to fight any efforts to establish a CBDC should he return to office, framing such a currency as a direct threat to personal freedom. Similarly, Kennedy has warned that a CBDC could grant the government unprecedented control over personal transactions, drawing a parallel with China’s digital yuan and its role in the country’s social credit system.