In a Monday report, several senators teamed up to oppose the White House’s plans to issue the central bank’s digital currency (CBDC). The senators opposed President Biden’s plans to issue the CBDC in the US.
Earlier, policymakers in the United States drafted a bill to restrict the issuance of the digital dollar. Months after formulating the bill, the policymakers convinced the US senator of the risk associated with the issuance of the CBDC.
Senators Oppose President Biden CBDC Project
A review of the draft bill demonstrated that the issuance of the digital dollar would grant the authority legal power to monitor the financial activities of American residents. The bill demonstrated that the issuance of CBDC will restrict US residents from accessing certain financial services.
On the contrary, the Biden administration argued that implementing CBDC would boost financial inclusivity in the US. Driven by the desire to improve the accessibility of financial products, the Biden administration instructed the Federal Reserve to conduct an extensive study to examine the benefits of CBDC.
In this study, the Fed will assess whether the issuance of CBDC will reduce transaction costs. Irrespective of the directives issued by the Biden Administration to the Fed, the US senators have expressed their concerns about the issuance of CBDC.
According to the report, five senators, including Senator Ted Cruz, Bill Hagerty, Ted Budd, Mike Braun, and Rick Scott, absconded the Biden CBDC bid. The five senators agreed to support the CBDC Anti-Surveillance State Act that opposes the implementation of digital dollar in the US.
Texas Senator Ted Cruz presented the bill before the US Senate on February 26. In his address, Senator Cruz argued that the Fed lacks legal power to oversee the issuance of CBDC.
Risk of Implementing CBDC
Citing the existing rules in the US, Cruz argued that the Fed required approval from Congress to proceed with the implementation of the digital dollar. Senator Cruz argued that using CBDC for monetary policy will threaten the US economy.
The 53-year-old politician argued that implementing the digital dollar will allow the Fed to spy on the spending habits of US residents. He urged Congress to clarify why the Fed has no authority to implement the digital dollar.
In support of Cruz’s argument, Senator Budd explained the need to protect Americans’ financial privacy. Senator Budd reiterated that implementing CBDC will allow US regulators to control the spending habits of US residents.
He encouraged the policymakers to oppose the implementation of the digital dollar. Based on the risk associated with the issuance of the CBDC, the new bill was supported by various advocacy groups, including Heritage Action of America (HAA), the Blockchain Association, and the American Bankers Association (ABA).
Other groups opposing the implementation of the digital dollar in the US included the Independent Community Bankers Association (ICBA) and the Club for Growth (CFG).
Americans Oppose Creation of CBDC
In an earlier interview, the Republican expressed concerns that the approval of the digital dollar will grant the government authority to mass surveillance on individual financial data.
Despite the anti-CBDC spirit evoked by the US senators, the Fed has not abandon the developed the digital dollar. Commenting on the ongoing discourse concerning the implementation of the digital dollar, the market critics argued if President Biden fails to be reelected in the upcoming election, then his CBDC plans will fail to actualize.
In contrast, Biden’s top opponent, Donald Trump, vowed to scrap further development of the digital dollar if he ascended to the presidency of the US in the 2024 elections. In an interview with Fox News, the former US president described the digital dollar as a very dangerous currency.
Trump argued that implementing the CBDC will possibly lead to losing funds in American bank accounts. The presidential aspirant told the Fox team that he would never allow the development of the digital dollar in the US.
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