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US Senator Ted Cruz introduced a bill on March 26 to prohibit the Federal Reserve from issuing a central bank digital currency (CBDC). The “Anti-CBDC Surveillance State Act,” would prohibit the Fed from offering certain products or services directly to American individuals, a key component of any CBDC.
The Texas Republican’s bill can be considered a companion bill to Minnesota Republican Representative Tom Emmer’s anti-CBDC legislation, which was reintroduced on March 6. A companion bill is a piece of legislation that is similarly or identically worded to another bill, and introduced in the other chamber of Congress.
Both bills state that the prohibition should not include any dollar-denominated currency that is open, permissionless, and private and “preserves the privacy protections of United States coins and physical currency.”
Since 2020, the Federal Reserve has been exploring a digital version of the US dollar. According to the CBDC Tracker, at least four research projects are currently underway by various Federal Reserve entities.
Cruz has been a vocal opponent of CBDCs since at least 2022, when he introduced legislation that would ban the Fed from introducing a direct-to-consumer CBDC. He followed it up with similar legislation in 2023, and in 2024 sought to block the attempt by then-President Joe Biden’s administration to create a CBDC.
Emmer said at a congressional hearing that “CBDC technology is inherently un-American” and warned that allowing unelected bureaucrats to issue a CBDC “could upend the American way of life.”
Related: North Carolina Senate overrides governor veto, passes bill banning CBDC
Critics denounce CBDCs
While CBDCs have some purported benefits, critics of the technology have long said that digital currency issued directly to citizens could pose privacy infringement and government overreach.
However, some nations and regional governments are still exploring this technology. While European consumers show little interest in CBDCs, lawmakers in the region are pushing to create a digital Euro. Israel has released a preliminary design to create a digital shekel, and Iran will reportedly launch a CBDC in the near future.
In the US, the creation of a CBDC has been met with more resistance. President Donald Trump has vowed to “never allow” a CBDC in the country, and Jerome Powell, the chair of the Federal Reserve, has said that the Fed will not issue a CBDC while he is in charge.
Though CBDCs could modernize legacy financial systems and make them more efficient, they would also centralize the money supply.
Magazine: Asia Express: India mulls new crypto ban to support CBDC, Lazarus Group strikes again
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