Republican Sen. Ted Cruz introduced new legislation on March 21 that would ban the Federal Reserve from launching a “direct-to-consumer” central bank digital currency (CBDC), citing concerns over its potential to be used as a “financial surveillance tool” by the federal government.
The latest bill is a second attempt by Cruz to stop the Federal Reserve from issuing a CBDC directly to individuals after he introduced a similar bill in March 2022.
-
The Importance of Prayer: How a Christian Gold Company Stands Out by Defending Americans’ Retirement
Sens. Mike Braun (R-Ind.) and Chuck Grassley (R-Iowa) are co-sponsors.
In a press release announcing the bill, Cruz noted that countries such as China are developing CBDCs that “omit the benefits and protections of cash, as well as the control and security of many existing digital cryptocurrencies,” adding that it is “more important than ever to ensure the United States’ digital currency policy protects financial privacy, maintains the dollar’s dominance, and cultivates innovation.”
The senator argued that CBDCs that fail to adhere to those principles risk allowing the central bank to “mobilize itself into a retail bank, collect personally identifiable information on users, and track their transactions indefinitely.”
He went on to note that CBDCs are issued and backed by a government entity and transactions are conducted through a centralized blockchain controlled by a single individual or entity, unlike decentralized digital currencies like bitcoin, which is one of the main advantages of using such cryptocurrencies.
Maximize savings. Support great patriot Mike Lindell. Use promo code “JDR” at MyPillow and take advantage of the $25 EXTRAVAGANZA happening right now.
Surveillance Fears
“Not only would this CBDC model centralize Americans’ financial information, leaving it vulnerable to attack, it could be used as direct surveillance tool into the private transactions of Americans,” he said.
Cruz also said the federal government has no authority to unilaterally establish a CBDC.
President Joe Biden signed an executive order in 2022 encouraging the Federal Reserve to explore and develop a CBDC for use in the United States. The order instructs the central bank to research, develop, and assess whether such a currency can be implemented in a way that “protects Americans’ interests” should it be deemed “in the national interest.”
In November, the Federal Reserve Bank of New York completed its first phase of a multiphase research effort dubbed “Project Cedar,” which examined how cross-border wholesale payments could be improved through the development of a blockchain-enabled wholesale CBDC prototype.
According to Fed officials, phase 1 proved to be a success and showed that blockchain-enabled cross-border payments can be “faster, simultaneous, and safer.”
Powell Says Fed Just ‘Experimenting’
In November, the Federal Reserve Bank of New York and several large financial companies—including Citigroup Inc., HSBC, and Wells Fargo & Company—participated in a digital dollar pilot project with Mastercard and SWIFT.
That 12-week program tested a version of an interoperable digital money platform known as the regulated liability network (RLN) that operated exclusively in U.S. dollars and allowed commercial banks to issue “simulated digital money or ‘tokens’—representing the deposits of their own customers—and settle through simulated central bank reserves on a shared multi-entity distributed ledger.”
In a separate pilot project, the New York Fed’s innovation center worked with the Monetary Authority of Singapore to see how wholesale central bank digital currencies could “improve the efficiency of cross-border wholesale payments involving multiple currencies.”
Bypass Big Tech Censors
Amid concerns over the Fed’s work on CBDCs, Fed Chairman Jerome Powell said at a House Financial Services Committee hearing earlier in March that no decision has been made regarding whether a CBDC is warranted in the United States.
“We’re not at the stage of making any real decisions,” said Powell. “What we’re doing is experimenting in kind of early stage experimentation. How would this work? Does it work? What’s the best technology? What’s the most efficient?”
Cruz is not the only Republican official to raise concerns over the central bank’s work regarding CBDCs.
Florida Gov. Ron DeSantis has called on state lawmakers to introduce legislation banning the digital dollar in Florida and urged other states to do the same.
Elsewhere, House Majority Whip Tom Emmer (R-Minn.) has also introduced the CBDC Anti-Surveillance State Act to prohibit the Fed from issuing a CBDC for use in monetary policy (pdf).
Our premium content partners at The Epoch Times has contacted the Federal Reserve for comment.
Image by Gage Skidmore via Flickr, CC BY-SA 2.0.
Bypass Big Tech Censors
It’s becoming increasingly clear that fiat currencies across the globe, including the U.S. Dollar, are under attack. Paper money is losing its value, translating into insane inflation and less value in our life’s savings.
Genesis Gold Group believes physical precious metals are an amazing option for those seeking to move their wealth or retirement to higher ground. Whether Central Bank Digital Currencies replace current fiat currencies or not, precious metals are poised to retain or even increase in value. This is why central banks and mega-asset managers like BlackRock are moving much of their holdings to precious metals.
As a Christian company, Genesis Gold Group has maintained a perfect 5 out of 5 rating with the Better Business Bureau. Their faith-driven values allow them to help Americans protect their life’s savings without the gimmicks used by most precious metals companies. Reach out to them today to see how they can streamline the rollover or transfer of your current and previous retirement accounts.