To stop the Federal Reserve from developing a CBDC for general use, Texas Republican and Ranking Member of the Senate Committee on Commerce, Science, and Transportation Ted Cruz introduced legislation.
According to Cruz and his supporters, the proposal introduced by Senators Braun (R-Ind.) and Grassley (R-Iowa) protects financial privacy by restricting the government’s ability to monitor individual transactions.
Cruz and his backers contend, according to the press release, that if CBDCs were to circumvent these fundamental principles, the Federal Reserve might transform into a retail bank, collect sensitive customer data, and follow individual transactions eternally. Although the Fed lacks the power to provide retail banking services at this time, it is already studying the establishment of a digital currency.
CBDCs, which are issued and backed by a government body and transact on a centralized, permissioned blockchain, represent a danger of centralizing Americans’ financial information and rendering it vulnerable to hackers, according to Senator Cruz. Moreover, Cruz argues that CBDCs might be a surveillance tool, enabling the government to monitor private transactions.
Senator Cruz said the federal government should not have the authority to issue a central bank currency unilaterally. He emphasized that the measure will encourage business, innovation, and personal liberty while prohibiting the concentration and control of cryptocurrencies.
Senators Braun and Grassley have expressed their support for the bill, emphasizing the significance of financial privacy and individual freedom from their respective perspectives.
Senator Cruz advocated at the Texas Blockchain Summit 2022 in November 2022 that the United States should pursue crypto as a strategic business.
Cruz said Bitcoin benefited the nation’s energy supply and constituted an “enormous surplus ” energy reservoir.
Senator said, “The beauty of it [Bitcoin mining] is that when you have substantial investment, as we do in Texas, and extreme weather conditions, such as extreme heat, which is common in Texas, or extreme cold, which occasionally occurs here, Bitcoin mining can be shut down in a fraction of a second. Making such power quickly accessible to the grid in order to heat or cool people’s homes in order to maintain company operations. This is a vast reserve of spare capacity.”
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