US senators reject Joe Biden’s plans for a central bank digital currency (CBDC)

A group of five senators in the United States have united to oppose the Biden administration’s plans to introduce a “digital dollar” by introducing legislation that calls for a ban on central bank digital currencies (CBDCs). U.S. Senator Ted Cruz, along with Senators Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun, introduced the CBDC Anti-Surveillance State Act on February 26, aiming to challenge the authority of the Federal Reserve to implement a CBDC. The senators are concerned that the administration’s CBDC could be designed to surveil citizens and impede on their freedom. Senator Cruz has called on Congress to clarify that the Federal Reserve does not have the power to implement a CBDC. The bill specifically opposes the Federal Reserve’s authority to offer certain products or services directly to individuals and to use a central bank digital currency for monetary policy. Senators Scott and Budd emphasized the importance of safeguarding the financial privacy of U.S. citizens. They argue that CBDCs, which they describe as “government-controlled programmable money,” could collect personal information on citizens and potentially freeze funds for any reason. If the legislation is passed, it would require congressional authorization for the issuance of any CBDC in the future. It would also prevent the Federal Reserve from becoming a retail bank. The legislation has received support from five associations, including Heritage Action for America, the Blockchain Association, the American Bankers Association, the Independent Community Bankers Association, and the Club for Growth. In contrast, former President Donald Trump, who is running for the 2024 presidential election, has vowed to never allow the creation of an in-house CBDC. Trump credited Vivek Ramaswamy for drawing attention to the adverse effects of CBDCs.