EXCLUSIVE: Senate Republicans are determined to restrict the Federal Reserve’s ability to create a so-called central bank digital currency, setting the stage for making the debut of a digital dollar an issue for the 2024 presidential campaign, FOX Business has learned.
Conservative lawmakers have been doubling down on their opposition to a central bank digital currency (CBDC), arguing the federal government could weaponize the technology by using it to spy on Americans’ financial activity and potentially restrict access to their money.
The Biden administration has sanctioned the Fed to conduct extensive research into the issuance of a CBDC as a way to make payments cheaper and more accessible to Americans, although no decision has been made to implement one.
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Texas Republican Sen. Ted Cruz, ranking member on the Senate Commerce Committee, told FOX Business that he and four Senate colleagues, including Bill Hagerty, R-Tenn., Rick Scott, R-Fla., Ted Budd, R-N.C., and Mike Braun, R-Ind., will sponsor a new bill called the Central Bank Digital Currency Anti-Surveillance State Act.
The legislation, which Cruz will introduce in the Senate on Monday, says the Federal Reserve lacks the authority to issue a CBDC, a digital version of the dollar, to Americans without authorization from Congress.
The Fed had no immediate comment.
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The new bill, also endorsed by advocacy groups Heritage Action for America, the Blockchain Association and the American Bankers Association, among others, will serve as companion legislation to House Majority Whip Tom Emmer’s Central Bank Digital Currency Anti-Surveillance State Act, which he reintroduced in the House in September. It has 75 members of Congress as co-sponsors.
Cruz’s bill, like Emmer’s, aims to prevent the Fed and its member banks from issuing a CBDC and using it to implement monetary policy and gain wider control over the economy.
"The Biden administration salivates at the prospect of emulating China’s use of CBDCs, 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," Cruz told FOX Business.
China is one of 11 countries to fully implement a CBDC, using the digital yuan to track the spending habits of its citizens. Conservative lawmakers fear the green lighting of a digital dollar would give the Fed an open window into the private financial data of U.S. citizens and use it for mass surveillance and to influence monetary policy.
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While the Fed has made no decision on pursuing the implementation of a CBDC, the Biden administration has made CBDC research a top priority. Any anti-CBDC legislation is likely to be shut down if Biden remains in office.
Anti-CBDC messaging has also become a rallying point among Republican presidential candidates wishing to tap into voters’ opposition to government surveillance, and the GOP sees it as an increasingly important voter issue.
Former President Donald Trump, who won the South Carolina primary on Friday, told Fox News earlier this month that implementing a digital dollar would be "very dangerous," claiming it could result in money suddenly disappearing from people’s bank accounts. He said in January that he would "never" allow the creation of a CBDC.
Former GOP presidential candidates Florida Gov. Ron DeSantis and entrepreneur Vivek Ramaswamy had similar messaging.
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Democrat-turned-Independent White House hopeful Robert F. Kennedy Jr. called CBDCs "a calamity for human rights and for civil rights" in a Jan. 24 interview, vowing to end efforts to move toward a CBDC in the U.S.
