This past Tuesday, Sen. Ted Cruz (R-TX) brought forth a new bill seeking to put a hard stop on the efforts from both the Federal Reserve and the Biden administration from creating a central bank digital currency.
Those against the creation of a potential central bank digital currency have stated that this asset, which would be under the sole management of the Federal Reserve and integrally tied to the value of the U.S. dollar, may spawn an increase in overall government surveillance and strengthen its control on the average private citizen. This legislation put forth by Cruz, and assisted by both Sen. Chuck Grassley (R-IA) and Sen. Mike Braun (R-IN), would establish a ban on monetary policymakers from setting in place any such technology.
“The federal government has no authority to unilaterally establish a central bank currency,” Cruz stated as part of his recent press release. “This bill goes a long way in making sure big government doesn’t attempt to centralize or control cryptocurrency and instead, allows it to thrive in the United States. We should be empowering entrepreneurs, enabling innovation, and increasing individual freedom, not stifling it.”
Cruz went on to highlight that the Federal Reserve could, in effect, set itself up as a retail bank and monitor the various transactions of all Americans if administration officials set up a central bank digital currency. He went on to assrt that such centralization of financial information would most certainly leave the nation far too vulnerable to cyberattacks and its resultant economic disruption.
Countries such as Japan, China, Australia, India, Russia, and South Korea are all also looking into creating central bank digital currencies, which have already been set up in countries such as the Bahamas, Nigeria, and Jamaica, as expressed in a report from the Atlantic Council. Sizable majorities, and in some cases supermajorities, of Americans stand against the creation and subsequent adoptions of a central bank digital currency, especially so if said technology brought and end to the use of physical cash or allowed the government to fully monitor all financial transactions, as explained by topline survey results out of the Cato Institute made public this past week.
Reportedly, President Joe Biden has stood in support of the study of a possible central bank digital currency and kicked off a “whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.” The Federal Reserve recently carried out a simulation alongside Citi, Mastercard, BNY Mellon, and other companies in an effort to figure out the “feasibility of payments between financial institutions” by using a central bank digital currency.
“The American people ought to be able to spend their money how they choose without the possibility that every transaction could be tracked by the government,” Grassley commented in the press release. “Allowing the government to centralize Americans’ financial information and increase surveillance of Americans’ financial activity is simply a bad idea,” concluded Braun.