Credit: CNBC
Senator Ted Cruz of Texas introduced a bill on Tuesday that aims at preventing the Federal Reserve from following the lead of totalitarian regimes like China in establishing a central bank digital currency. The legislation, S.887, is co-sponsored by Senators Mike Braun of Indiana and Chuck Grassley of Iowa. It cites that a CBDC would be used as a “financial surveillance tool by the federal government.”
“The federal government has no authority to unilaterally establish a central bank currency,” Cruz said in a statement.
Cruz said that the bill has been referred to the Committee on Banking, Housing, and Urban Affairs. He said it “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.”
Feder Reserve Chair Jerome Powell said in June 2022 that an American CBDC could “potentially help maintain the dollar’s international standing,” noting that the Fed was considering whether it might “improve on an already safe and efficient domestic payments system.”
While the Fed thinks this is worth looking into, Braun noted that a U.S. CBDC “is simply a bad idea.”
“The federal government should not have even more control over your own money,” added Braun.
The Blaze reported:
Nationally syndicated radio host and co-founder of Blaze Media Glenn Beck recently underscored that the problem with a CBDC is that “there is no physical cash. There’s even [a physical aspect] with Bitcoin — you can take it on a thumb drive and you stick it in your pocket, or you can move it from one off-ramp to another. Just memorize your seed phrase, that’s all … but it’s yours.”
Conversely, with a CBDC, it’s only electronic, “only in the Federal Reserve System,” noted Beck.
The CATO Institute published a study last month that identified several faults with a CBDC, emphasizing that it would “most likely be the single largest assault to financial privacy since the creation of the Bank Secrecy Act and the establishment of the third-party doctrine.”
The study indicated that a CBDC will make the process by which governments freeze someone’s financial resources — as Canadian banks did in concert with the Trudeau government in its crackdown efforts on peaceful protesters in 2022 — easier and faster, having established “a direct line between citizens and the government itself.”
Policymakers would also be able to set negative interest rates which would force spending by causing people to lose money.
Not only would this be a loss of transparency and a new ability to force spending, but the government would also be put in a position where it could prohibit people from buying certain goods, like alcohol.
The Blaze also noted:
Cruz’s Tuesday statement advanced another concern raised in the CATO study: A CBDC would leave Americans’ financial information vulnerable to attack. The study noted recent IRS data breaches have evidenced the fallout that might occur if hundreds of millions of Americans’ sensitive financial information were centralized, then breached.
Grassley raised the point that a decision this impactful shouldn’t be made by government bureaucrats, but by elected representatives of the American people.
Grassley said 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.”
Cruz introduced this bill a day after Gov. Ron DeSantis announced legislation to ban CBDCs in Florida.
“The Biden administration’s efforts to inject a Centralized Bank Digital Currency is about surveillance and control,” DeSantis said in a statement.
“Today’s announcement will protect Florida consumers and businesses from the reckless adoption of a ‘centralized digital dollar’ which will stifle innovation and promote government-sanctioned surveillance.”
DeSantis’ office suggested that a federally controlled CBDC was “the most recent way the Davos elites are attempting to backdoor woke ideology like Environmental, Social, and Governance (ESG) into the United States financial system, threatening individual privacy and economic freedom.”
Foundation for Government Accountability CEO Tarren Bragdon said, “Our money says In God We Trust. The central bank digital currency changes that to In Government We Trust. That’s wrong and I am grateful for the Governor’s continued pushback of an out-of-control DC bureaucracy.”
