In a move that could have significant implications for the future of digital currency in the United States, Senator Ted Cruz has proposed legislation that would prevent the Federal Reserve from creating a central bank digital currency (CBDC) for consumer use.
As the Ranking Member of the Senate Committee on Commerce, Science, and Transportation, Cruz has emerged as a leading voice in the debate over the role of government in developing and regulating digital currencies.
The proposed legislation, co-sponsored by Senators Braun and Grassley, has been hailed by Cruz and his supporters as a crucial step in protecting individual privacy in the digital age. The bill aims to prevent the government from creating a CBDC that would allow for the monitoring of individual financial transactions, a prospect that many critics see as a threat to personal liberty and financial autonomy.
Cruz and supporters wary of CBDCs over privacy fears
In a press release, Cruz and his supporters expressed concerns that implementing CBDCs could undermine fundamental principles by enabling the Federal Reserve to operate as a retail bank, collect personal data, and track individual transactions without limitations. Despite lacking the authority to provide retail banking services, the Federal Reserve is exploring the possibility of launching a digital currency.
Based on Senator Cruz’s assertions, CBDCs are digital currencies endorsed and issued by the government and run on a regulated, approved blockchain. He argues that CBDCs may centralize the financial data of American citizens, leaving them vulnerable to cyberattacks. Additionally, Cruz suggests that CBDCs could be used for surveillance, allowing the government to monitor private transactions.
Senator Cruz further proclaimed that the federal government should not possess the authority to establish a centralized bank currency unilaterally. He also underscored that the proposed legislation would encourage creativity, pioneering spirit, and personal liberty while averting the concentration and regulation of digital currencies.
Senators Braun and Grassley have endorsed the legislation, emphasizing the significance of preserving financial privacy and individual liberty as their main reasons for support.
Senator Cruz backs Bitcoin as an energy surplus
During the Texas Blockchain Summit 2022 in November, Senator Cruz declared that cryptocurrency could serve as a strategic industry for the country to cultivate. According to Cruz, Bitcoin benefits the country’s energy supply and can serve as a significant source of surplus energy.
Senator Cruz praised the surplus of crypto mining supply, stating that it is advantageous, and highlighted Texas’s favorable position in the crypto industry due to its plentiful and inexpensive energy. He also expressed his support for Bitcoin, citing its independence from government control as a reason for his admiration.