Federal Reserve's Plans for Digital Currency Spark Congressional Concerns

Senator Cruz's Companion Bill Prohibit Fed's CBDC, Digital Dollar

A new bill introduced by Senator Ted Cruz (R-TX) aims to prohibit the Federal Reserve from issuing a central bank digital currency (CBDC) or a digital dollar. The bill, titled the "Central Bank Digital Currency (CBDC) Prohibition Act," is a companion bill to the "Digital Dollar Act" introduced by Representative Warren Davidson (R-OH) in the House of Representatives.

The bill defines a CBDC as "a digital representation of fiat currency that is issued by a central bank or monetary authority and is designed to be used as a medium of exchange, unit of account, or store of value." It prohibits the Federal Reserve from issuing a CBDC, citing concerns about the potential risks and implications for the US financial system.

Senator Cruz expressed his concerns about the potential risks associated with a CBDC, stating that it could undermine the US dollar's status as the global reserve currency and potentially create a "new form of government control" over people's financial lives.

The bill has been met with support from some lawmakers and financial experts, who argue that a CBDC could be used to circumvent the traditional banking system and facilitate illicit activities. Others have expressed concerns about the potential for a CBDC to be used for surveillance and monitoring of individuals' financial transactions.

The bill is currently in the early stages of the legislative process and has yet to be scheduled for a vote. If passed, it would effectively prohibit the Federal Reserve from issuing a CBDC or digital dollar, and would likely have significant implications for the US financial system.