US Senators have renewed their assault on any potential central bank digital currency (CBDC) based on the dollar.
Republican lawmakers including Ted Cruz, Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun, yesterday filed The CBDC Anti-Surveillance State Act.
Their proposal pulls no punches. One part amends the Federal Reserve Act to read: ‘‘no Federal Reserve bank shall offer products or services directly to an individual, maintain an account on behalf of an individual, or issue a central bank digital currency, or any digital asset that is substantially similar, under any other name or label, directly to an individual.’’
Ensuing sections prohibit the Fed from indirectly issuing a CBDC or using one to implement monetary policy.
The last part of the Act includes a disclaimer stating that none of the proposed bans apply to current cryptocurrency stablecoin issuers.
So, for Tether, Circle and other dollar coin issuers: “this Act and the amendments made by this Act shall not apply to any dollar-denominated currency that is open, permissionless, and private, and fully preserves the privacy protections of United States coins and physical currency.”
In a press statement, Texas Senator Ted 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.”
Senators Battle Over CBDCs and DAMLA
Senator Elizabeth Warren’s anti money-laundering (AML) DAAMLA legislation was introduced in 2022, and the lawmaker has been trying to push it through congress since.
Opponents like US crypto advocacy group, the Chamber of Digital Commerce (CDC) claim she is “trying to kill the entire industry” by placing stringent and often impractical transaction reporting requirements placed on crypto miners and validators.
Like the debate on CBDCs, the debate around DAAMLA has intensified lately, as crypto becomes a sticking point in the Presidential race this year.
Washington lobbying group, the Blockchain Association, sent its second letter to the House Financial Services Committee and Senate Banking Committee, expressing concerns over DAAMLA.
The letter attracted 80 signatories, among whom were many former military, law and intelligence officials. A letter, sent the previous November attracted 40 signatories.
Recently, the chair of the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion, US Congressman French Hill, highlighted that subjecting miners/validators to more stringent reporting requirements makes little sense, as they do not deal directly with customers but instead provide a necessary service for the running of blockchain networks.