Republican Bill Seeks To Ban Central Bank Digital Currency In US

 Republican Sen. Ted Cruz introduced new legislation on March 21 that would ban the Federal Reserve from launching a "Direct-to-consumer" central bank digital currency, citing concerns over its potential to be used as a "Financial surveillance tool" by the federal government.

In a press release announcing the bill, Cruz noted that countries such as China are developing CBDCs that "Omit the benefits and protections of cash, as well as the control and security of many existing digital cryptocurrencies," adding that it is "More important than ever to ensure the United States' digital currency policy protects financial privacy, maintains the dollar's dominance, and cultivates innovation."

The senator argued that CBDCs that fail to adhere to those principles risk allowing the central bank to "Mobilize itself into a retail bank, collect personally identifiable information on users, and track their transactions indefinitely."

The order instructs the central bank to research, develop, and assess whether such a currency can be implemented in a way that "Protects Americans' interests" should it be deemed "In the national interest."

In November, the Federal Reserve Bank of New York and several large financial companies-including Citigroup Inc., HSBC, and Wells Fargo & Company-participated in a digital dollar pilot project with Mastercard and SWIFT. That 12-week program tested a version of an interoperable digital money platform known as the regulated liability network that operated exclusively in U.S. dollars and allowed commercial banks to issue "Simulated digital money or 'tokens'-representing the deposits of their own customers-and settle through simulated central bank reserves on a shared multi-entity distributed ledger."

In a separate pilot project, the New York Fed's innovation center worked with the Monetary Authority of Singapore to see how wholesale central bank digital currencies could "Improve the efficiency of cross-border wholesale payments involving multiple currencies."

Cruz is not the only Republican official to raise concerns over the central bank's work regarding CBDCs.

https://noqreport.com/2023/03/23/republican-bill-seeks-to-ban-central-bank-digital-currency-in-us/