Republican Senator Ted Cruz proposed legislation late Tuesday to block the issuance of central bank digital currencies (CBDCs) in the United States, joining a growing number of high-profile Republican politicians opposing the idea.
In a statement on Tuesday, the Texas lawmaker said the U.S. government "has no right to unilaterally establish a central bank currency." A CBDC is a digital version of a national fiat currency, such as the US dollar or euro, backed by a central bank. Senator Cruz, co-sponsored by Senators Mike Braun (R-Ind) and Charles E. Grassley (R-Iowa), argued that having a CBDC in the United States controlled by the Federal Reserve would jeopardize the financial information of U.S. Ways to potentially monitor state.
"Unlike decentralized digital currencies such as Bitcoin, CBDCs are issued and backed by government entities and traded on a centralized, permissioned blockchain," Cruz's statement read.
“This CBDC model would not only centralize Americans’ financial information and make them vulnerable,” Cruz added, “it could also be used as a tool for [a] direct surveillance of Americans’ private transactions.” A few days ago, Florida Governor Ron DeSantis also proposed similar legislation, hoping to ban CBDCs from southern states, claiming that this technology will be used to "surveillance and control Americans", Senator Cruz made the proposal.
As Cruz pointed out, CBDCs are distinct from digital assets such as bitcoin, ethereum or dogecoin. Unlike such decentralized cryptocurrencies, CBDCs are overseen and operated by a centralized entity a central authority like a government controls them. Countries around the world are at different stages of research. China is more advanced than others in the CBDC game - some citizens are already able to use the digital yuan. Senator Cruz’s statement today singled out China, claiming that its CBDC strategy ignores the “benefits and protections of cash.”
Sen. Cruz, however, is passionate about decentralized cryptocurrencies: The lawmaker previously introduced legislation that would allow politicians to use their bitcoins on Capitol Hill.
