Sen. Cruz Introduces Legislation to Ban Central Bank Digital Currencies

U.S. Sen. Ted Cruz (R-Texas), joined by Sens. Bill Hagerty (R-Tenn.), Rick Scott (R-Fla.), Ted Budd (R-N.C.), and Mike Braun (R-Ind.), today filed legislation to halt efforts by the Biden administration to issue a central bank digital currency (CBDC):

About the bill, Sen. Cruz said, “The Biden administration salivates at the thought of infringing on our freedom and intruding on the privacy of citizens to surveil their personal spending habits, which is why Congress must clarify that the Federal Reserve has no authority to implement a CBDC. I’m proud to lead the fight in the Senate to restrict the Federal Reserve’s exploration of and attempt to introduce a CBDC to the American economy.”

Sen. Hagerty said, “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.”

Sen. Rick Scott said, “Big government has no business spying on Americans to control their personal finances and track their transactions. It is a massive overreach and a non-starter for me. That is why I am proud to join Senator Ted Cruz to introduce the CBDC Anti-Surveillance State Act to stand up against this invasive practice and keep Big Brother out of your bank account.”

Sen. Budd said, “As Americans face the prospect of an increasingly weaponized government, ensuring financial privacy is pivotal. A CBDC would open the door for the federal government to surveil and control the spending habits of all Americans. Any push to establish a CBDC must be confronted and stopped, and that’s why I’m proud to join Senator Cruz’s effort to do just that.”

A CBDC is government-controlled programmable money that, if not designed to emulate cash, could give the federal government not only significant transaction-level data down to the individual user, but also the ability to program the CBDC to choke out politically unpopular activity.

The CBDC Anti-Surveillance State Act would prohibit the Federal Reserve from issuing a CBDC directly to anyone, ensuring the Federal Reserve can’t mobilize itself into a retail bank. It would also bar the Federal Reserve from issuing a CBDC indirectly to individuals through financial institutions or other third parties, as well as prevent the Federal Reserve from using a CBDC as a tool to implement monetary policy and control the economy. Finally, the bill would require authorizing legislation from Congress for the issuance of any CBDC.

Read the legislation here.

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).

Heritage Action for America said, “While Americans across the country are being punished for thinking, speaking, and voting the ‘wrong’ way, the last thing we need is the government surveilling personal finances. A Central Bank Digital Currency (CBDC) is a fixed-value, government-run cryptocurrency that replaces the dollars in your bank and wallet. Anti-CBDC legislation is necessary to safeguard Americans' financial privacy in the face of potential surveillance, control, and political intimidation. Heritage Action and our two million grassroots activists nationwide encourage congressional action on this issue. We will be issuing a Key Vote Cosponsorship to encourage support for Senator Cruz and Whip Emmer’s bill—the Anti-Surveillance State Act—and will include cosponsorship on our legislative scorecard.”

The Blockchain Association said, “CBDCs present major privacy concerns for everyday Americans, including granting the government the ability to collect intimate personal details on U.S. citizens, and potentially track and freeze funds for any reason. We applaud the introduction of the CBDC Anti-Surveillance State Act in the Senate – legislation aimed at preventing a CBDC from being issued in the United States.”

ABA President and CEO Rob Nichols said, “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.”

ICBA President & CEO Rebeca Romero Rainey said, “ICBA and the nation’s community banks strongly oppose the creation of a U.S. central bank digital currency, which 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.”

David McIntosh, the President of Club for Growth said, “The creation of a U.S. CBDC would threaten the financial health of the country and the constitutional rights of law-abiding Americans. It would subject Americans to financial surveillance and discrimination should they hold the ‘wrong’ beliefs, hurt economic growth by crowding out private sector investment, and create significant financial volatility by incentivizing Americans to pull their capital from private banks. Club for Growth applauds Senator Cruz’s introduction of this critical legislation to protect Americans from the dangers of a CBDC.”

Sen. Cruz has long been a champion for free markets and cryptocurrency.

• Sen. Cruz  previously introduced legislation to prohibit the Federal Reserve from developing a direct-to-consumer central bank digital currency which could be used as a financial surveillance tool by the federal government in both 2022 and 2023.
• Sen. Cruz authored the Adopting Cryptocurrency in Congress as an Exchange of Payment for Transactions Resolution, also known as the ACCEPT Resolution.
• Sen. Cruz introduced an amendment to repeal a provision from the 2021 infrastructure package that created new reporting requirements for many cryptocurrency and blockchain companies in both the 117^th and 118^th congresses.