US Senators Kick Against White House’s Plans for a Digital Dollar

Jimmy Aki
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Five US Senators have joined hands in championing an anti-CBDC bill to checkmate the White House’s growing powers. The bill, titled the CBDC Anti-Surveillance State Act, seeks to curb what the Senators view as the Biden administration’s overreach in financial surveillance.

CBDC Anti-Surveillance Act Makes a Splash

Introduced on February 26, the bill seeks to restrict the Federal Reserve (Feds) from offering certain products or services directly to individuals.

The bill also seeks to prohibit using central bank digital currency (CBDC) for monetary purposes. This means the Feds could not operate as a retail bank by offering digital dollars directly to US citizens.

The anti-CBDC bill, led by Senator Ted Cruz, is gaining traction in the US Congress. Additionally, Senators Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun support the CBDC Anti-Surveillance State Act.

Sharing insights into the game plan behind this new legislation, the five-person team stated that US citizens’ financial privacy is paramount. They noted that a Fed-issued CBDC would enable the government to monitor and control all Americans’ spending habits.

Hence, the bill sponsors stated that any push to establish a CBDC should be confronted and stopped. The Feds, led by Jerome Powell, has remained silent on introducing a potential CBDC or digital dollar into the mainstream.

Nonetheless, the concept is being discussed internally, as revealed by Feds’ Vice Chairman for Supervision Michael Barr. The Fed’s top official stated no decision had been made on whether a digital dollar could become the accepted medium.

He stated the US financial authority would proceed with a digital dollar only with White House and Congressional approval.

90% of Global Banks Experimenting With CBDCs

Central Bank Digital Currencies (CBDCs for short) are state-backed digital equivalents of fiat currencies. They are built on blockchain technology, known for its transparency and security. However, unlike other blockchain applications prioritizing privacy, CBDCs may lack similar privacy protections.

Given that it is state-backed, CBDCs are akin to regular fiat. Many fear that its introduction could spell doom for any thought of wealth control by individuals.

Senator Cruz stated that CBDCs are “government-controlled programmable money,” able to collect user details, tracking and freezing assets at will.

Senator Cruz’s views are also supported by pro-privacy associations like Heritage Action for America (HAFA), the Blockchain Association, the American Bankers Association (ABA), the Independent Community Bankers Association (ICBA), and the Club for Growth (CFG).

While the US is facing a strong backlash from citizens and legislators, other apex banks are committing more time and resources towards creating digital versions of their fiat currencies.

According to a blog post by the US central bank, over 90% of apex banks are exploring CBDCs. Shedding more light, Juniper Research notes that CBDC payments could account for $213 billion in global payments.

The projection is put at 2030.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.