Ban CBDCs: Senators Wage War Against “Government-Controlled Money”

A digital dollar, or US CBDC, is unlikely to happen soon, given the ongoing backlash from US citizens and legislators.

A group of US senators, including Ted Cruz, Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun, have introduced a new bill to prevent the Federal Reserve from issuing a central bank digital currency (CBDC) in the US.

The senators also demand a complete prohibition against offering a digital dollar or any similar digital asset directly to US citizens.

TLDR

• A group of US senators have introduced a new bill to prevent the Federal Reserve from issuing a central bank digital currency (CBDC) directly to US citizens.
• The senators say a CBDC would enable extensive government monitoring and control over Americans’ spending, violating privacy.
• The bill has gained support from various groups including the Blockchain Association, American Bankers Association, and Club for Growth.
• Presidential candidates Donald Trump and Robert Kennedy have also pledged to not allow a CBDC if elected, while Joe Biden’s administration is still considering it.
• Several countries are exploring CBDCs but plans often face public and political opposition due to privacy concerns around the government having control over programmable digital money.

No Love For A US CBDC!

According to a bill that surfaced today, the senators seek approval to prevent the Fed from offering financial services directly to citizens and opening and managing accounts for individual citizens.

“No Federal Reserve bank shall offer products or services directly to an individual, maintain an account on behalf of an individual, or issue a central bank digital currency, or any digital asset that is substantially similar, under any other name or label, directly to an individual,” the bill states.

Senators Scott and Budd said that the establishment of a CBDC would enable the federal government to extensively monitor and control the spending of all Americans. This is considered a form of privacy violation that the government could have over individuals, and the bill aims not to let it happen.

As noted by Senator Cruz, a CBDC is “government-controlled programmable money” that could collect sensitive payment and user data. Without appropriate judicial oversight, a CBDC threatens economic freedom as users can lose their bank accounts or money if they do something the government does not approve of.

The bill has gained support from numerous entities, including the Blockchain Association, Heritage Action for America (HAFA), the American Bankers Association (ABA), the Independent Community Bankers Association (ICBA), and the Club for Growth (CFG).

A CBDC and The US Presidential Election

In the United States, opinions about the digital dollar are divided.

While Joe Biden’s administration is considering the launch of a CBDC, his plan faces major backlash from his citizens.

In a speech in New Hampshire last month, Donald Trump pledged to never allow the issuance of CBDC in the US if elected. Trump reiterated his opposition to the currency in a recent conversation with entrepreneur Vivek Ramaswamy.

Apart from the disagreement over a CBDC plan, Trump surprisingly showed a nuanced stance toward Bitcoin, unlike his previous dismissive stance. In an interview with FOX News last week, he said that more people want to pay in Bitcoin, and he could live with it.

Another US presidential candidate who joined the anti-CBDC list is Robert Kennedy. He is the first US presidential candidate to accept Bitcoin (BTC) for his election campaign donations. Kennedy said that if elected, he would end US pressure on cryptocurrencies.

Additionally, Kennedy promised that if elected president, he would never allow the establishment of a CBDC in the US. He said he was very concerned about government restrictions on Bitcoin, expressing the need for an independent and uncontrolled currency.

During President Joe Biden’s term, there has been a significant change in the way the cryptocurrency market is regulated. While some degree of regulation is essential for ensuring long-term stability and credibility, there are concerns that excessive oversight could stifle the innovative potential of the market.

Several countries have been exploring the design and feasibility of a CBDC. The most known case is the pilot of a digital yuan, a CBDC issued by China’s central bank.

The European Central Bank (ECB) recently reported that it had planned to launch a digital euro, which is currently in the works. Like other CBDC plans, the digital euro also faces opposition from many EU lawmakers; some even called for a complete ban of the ECB’s plan to issue a digital euro.

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