Rafael Edward Cruz is an American lawyer and politician who represents Texas as the junior US senator. He has always been a passionate fighter for economic growth, limited government, and natural security. Ted serves as the Chairman of the Commerce Committee, a position that offers him a far-reaching impact on innovation and growth across the landscape of daily life. He as a chairman is focused on making more innovation in the telecommunication space, protecting privacy and security, ensuring the US continues to lead the world in space exploration, and allowing Americans to travel safely and more efficiently.
Lately, U.S. Sen. Ted Cruz (R-Texas) introduced an ANti-CBDC Surveillance State Act, which prohibits the Federal Reserve from issuing a central bank digital currency (CBDC). Senator Cruz has said that cryptocurrency represents financial freedom, privacy, and innovation and he believes that a Central Bank Digital Currency (CBDC) may undermine these values, restrain innovations, and erode privacy. Thus, he introduced a bill to restrict the implementation of a CBDC.
Why did Senator Cruz Introduce a Bill to Ban the Federal Reserve from Issuing a CBDC?
Sen. Cruz has previously introduced legislation in 2022 and 2023 in order to prohibit the Federal Reserve from developing a direct-to-consumer central bank digital currency that can be used as a financial surveillance tool by the federal government. He disapproved the IRS’s Gross Proceeds Reporting rule for brokers handling digital asset sales. This decision was made mainly because it would have harmed the digital asset industry by imposing burdensome reporting requirements on decentralized finance (DeFi) participants.
This legislation was originally introduced in 2024 with the aim of halting the Biden administration’s efforts to issue a central bank digital currency. Also, Sen. Cruz introduced an amendment to repeal a provision from the 2021 infrastructure package, which has created new reporting requirements for many cryptocurrency and blockchain companies in the 117th and 118th Congresses.
The legislation was cosponsored by Sens. Thom Tillis (R-N.C.), Ted Budd (R-N.C.), and Kevin Cramer (R-N.D.). Sen. Cramer claimed that a Central Bank digital currency has the potential for financial monitoring and surveillance that could turn the Federal Reserve into a retail bank. He says that even though the administration pushes this, Congress should not be circumvented, which is why the bill will ensure it. On the other hand, Sen.
Tillis stated that this legislation is a crucial step to protect America’s financial privacy and ensure that the federal government does not have unchecked power over how people spend money. It should be noted that if a Central Bank digital currency is misused, it could become a surveillance tool that threatens individual freedoms and free market principles. Tillis said he is proud to be supporting the bill to help defend the American people from government overreach.
As for why Sen. Cruz introduced this bill, it was endorsed by the following:
- America First Policy Institute.
- American Bankers Association.
- Bank Policy Institution.
- America’s Credit Unions.
- Americans Tax Reform.
- Independent Community Bankers of America.
- Association of Mature American Citizens.
- Blockchain Association.
- Club for Growth.
- Consumer Bankers Association.
- Center for Freedom and Prosperity.
- Restore the Fourth.
- Heritage Action.
- Project for Privacy & Surveillance Accountability.
- Small Business & Entrepreneurship Council.
- Digital Chamber.
- Crypto Council for Innovation.
Conclusion
Senator Cruz made a decision to ban the Federal Reserve from issuing a CBDC because he foresaw its potential downsides. It can also cause negative impacts, including privacy concerns due to centralized data collection, the potential for increased government surveillance, and possible disruption to the existing financial system. This can lead to bank runs or difficulties for traditional banks.
Thus, US Senator Ted Cruz introduced a bill on March 26 called the ‘Anti-CBDC Surveillance State Act’. This bill was passed to prohibit the Fed from offering certain products or services directly to American individuals, which is a key component of any CBDC. Ted has been a vocal opponent of CBDCs since 2022 when he introduced the legislation and followed it up with similar legislation in 2023. In 2024, he sought to block the attempt by Fed by passing the bill. The critics say that CBDCs indeed have some purported benefits, but digital currency when issued directly to citizens could pose privacy violations and government overreach.