In a recent development, a group of US senators has positioned themselves to squarely reject the Biden administration’s ambition to introduce a central bank digital currency (CBDC). In this case, a digital version of the US dollar. This move holds particular interest for UK citizens well-acquainted with the ongoing debates surrounding digital currencies and the privacy, sovereignty and broader financial system concerns.
On February 26, Senator Ted Cruz, alongside Senators Bill Hagerty, Rick Scott, Ted Budd and Mike Braun, introduced the “CBDC Anti-Surveillance State Act” legislation. It poses a challenge to the Federal Reserve’s plans to mint a Digital Dollar. The legislation has deep concerns over the potential for such a currency to enable state surveillance and control over citizens’ finances.
The proposed bill reeks of fears that the Biden-administration-backed CBDC would give the US government powers to monitor and regulate its citizen’s spending habits. Ideally, the concept of a government-controlled CBDC and programmable money raises eyebrows. Talk about its capacity to collect personal data, enabling the tracking and freezing of funds for whatever reasons.
Senator Cruz asked Congress to restrict the Federal Reserve’s authority significantly by preventing it from directly offering products or services to individuals. This works to ensure the Federal Government does not function as a retail bank as well. This legislative push also demands that any future issuance of a CBDC would require explicit authorization from Congress, a step designed to allow for parliamentary checks against the free Digital Dollar roll-out.
Apparently, this action doesn’t exist in isolation. Notably, the outcry against CBDC has had the backing of former US President Donald Trump. He has been so vocal on the subject and, in his bid for the 2024 presidential race, promised to oppose the creation of a domestic CBDC, citing dangerous implications.
Cutting across the Atlantic, this topic is of particular interest to the UK, where discussions around the potential introduction of a digital pound, or “Britcoin“, are ongoing. The American fit over the principles, potential benefits and possible dangers of a CBDC inevitably influences global discourse on the future of money.
Yet, UK watchers are on high alert for the “CBDC Anti-Surveillance State Act” by notable organizations like Heritage Action for America, the Blockchain Association, the American Bankers Association, the Independent Community Bankers Association and the Club for Growth. This broad coalition highlights the widespread anxiety towards a centrally controlled Digital Currency about the high chances of implementation.
As the UK contemplates its digital currency future, the recent US developments offer a cautionary point on the complexities involved in reconciling the promise of Blockchain technology. It becomes sketchier when you realize we have the US presidential election this year with Trump and Biden as the major contenders. It is evident how the two are worlds apart, just like snow and desert. The latest developments in the US will likely inform and perhaps caution policymakers in the UK and elsewhere, emphasizing the need for a careful and balanced approach to the evolving digital space of national and international finance.
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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
