US Senator Ted Cruz introduces a new bill to prevent the Federal Reserve from issuing Central Bank Digital Currencies directly to individuals. He believes that CBDCs will centralize the information of users, which will make it vulnerable. It could become a surveillance tool to monitor the lives of American citizens. This will be far from the privacy-centric approach of the private players in the industry.
The new bill by US Senator Ted Cruz
Ted Cruz, with support from other Senators Mike Braun and Chuk Grassley, has introduced this new bill in legislation. The main idea behind this is to protect the privacy of Americans, which CBDCs will put at risk. It doesn’t speak against CBDCs per se; however, the federal reserve shouldn’t have the authority to issue them to individuals directly. They mustn’t be allowed to maintain individual accounts or offer any other products directly.
Ted also says that it will maintain the dominance of the US Dollar without needing to compete with private cryptocurrencies. Right now, the Federal Reserve doesn’t have the authority to offer retail accounts, and it should stay that way.
What should Central Bank Digital Currencies be like?
According to Ted Cruz, the main things that CBDCs should follow are financial privacy protection, promoting innovation, and maintaining the dollar’s dominance. And if they fail to do that will be making the Federal Reserve into a retail bank with the power to hinder the privacy of users and collect data. And since all the data will be centralized, it will become vulnerable to attacks.
If the government doesn’t change its approach, it will be directly competing with the private sector. At the same time, innovation will suffer. So, the ability to nurture and encourage development in this industry or completely destroy it is in the hands of the Feds.
Central Bank Digital Currencies totally defeat the purpose of cryptocurrencies like Bitcoin, which have become popular for their decentralized nature. CBDCs will be the same as the dollar, just in a virtual form with the authorities in total control of it.
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