A group of Senate Republicans introduced legislation this week that seeks to halt any efforts by the federal government to create a central bank digital currency (CBDC).
The CBDC Anti-Surveillance State Act (S. 3801) would prohibit the Federal Reserve from issuing a CBDC directly or indirectly to individuals through financial institutions or other third parties. Further, it seeks to prevent the Federal Reserve from using a CBDC as a tool to implement monetary policy and require authorizing legislation from Congress for the issuance of any CBDC.
The bill is sponsored by Sens. Bill Hagerty (R-TN), Ted Budd (R-NC), and Mike Braun (R-IN), Rick Scott (R-FL), and Ted Cruz (R-TX).
“From Operation Chokepoint to recent reports of political and religious profiling by FinCEN, it is clear that government bureaucrats have been far too willing to exploit the financial system to advance political agendas and target Americans. This bill blocks the issuance of a central bank digital currency, preventing CBDC from being used as a tool to surveil and violate Americans’ privacy,” Hagerty said.
The legislation is endorsed by Heritage Action for America (HAFA), the Blockchain Association, the American Bankers Association (ABA), the Independent Community Bankers Association (ICBA), and Club for Growth (CFG).
“ABA has long believed that a CBDC would pose significant risks to our financial system that would outweigh any potential benefits, including undermining the critical role that banks play in extending credit and powering the economy. We applaud Sen. Cruz and his cosponsors for introducing this important legislation that will help protect consumers and our financial system,” ABA President and CEO Rob Nichols said.
ICBA President and CEO Rebeca Romero Rainey added that the creation of a U.S. central bank digital currency would disintermediate community banks, reduce credit availability, and undermine consumer privacy.
“By barring the Federal Reserve from issuing a U.S. CBDC to consumers, the CBDC Anti-Surveillance State Act would avoid the unnecessary risks to consumers and small businesses that a U.S. CBDC would pose. We encourage Congress to continue advancing this important legislation,” Rainey said.