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Senator Cruz introduces companion bill to prohibit the Fed from issuing a CBDC

US Senator Ted Cruz introduced a bill on March 26 to prohibit the Federal Reserve from issuing a central bank digital currency (CBDC). The “Anti-CBDC Surveillance State Act,” would prohibit the Fed from offering certain products or services directly to American individuals, a key component of any CBDC.

The Texas Republican’s bill can be considered a companion bill to Minnesota Republican Representative Tom Emmer’s anti-CBDC legislation, which was reintroduced on March 6. A companion bill is a piece of legislation that is similarly or identically worded to another bill, and introduced in the other chamber of Congress.

Both bills state that the prohibition should not include any dollar-denominated currency that is open, permissionless, and private and “preserves the privacy protections of United States coins and physical currency.” 

Senator Cruz introduces companion bill to prohibit the Fed from issuing a CBDC

Sen. Ted Cruz’s anti-CBDC bill. Source: Ted Cruz

Since 2020, the Federal Reserve has been exploring a digital version of the US dollar. According to the CBDC Tracker, at least four research projects are currently underway by various Federal Reserve entities.

Cruz has been a vocal opponent of CBDCs since at least 2022, when he introduced legislation that would ban the Fed from introducing a direct-to-consumer CBDC. He followed it up with similar legislation in 2023, and in 2024 sought to block the attempt by then-President Joe Biden’s administration to create a CBDC.

Emmer said at a congressional hearing that “CBDC technology is inherently un-American” and warned that allowing unelected bureaucrats to issue a CBDC “could upend the American way of life.”

Related: North Carolina Senate overrides governor veto, passes bill banning CBDC

Critics denounce CBDCs

While CBDCs have some purported benefits, critics of the technology have long said that digital currency issued directly to citizens could pose privacy infringement and government overreach.

However, some nations and regional governments are still exploring this technology. While European consumers show little interest in CBDCs, lawmakers in the region are pushing to create a digital Euro. Israel has released a preliminary design to create a digital shekel, and Iran will reportedly launch a CBDC in the near future.

In the US, the creation of a CBDC has been met with more resistance. President Donald Trump has vowed to “never allow” a CBDC in the country, and Jerome Powell, the chair of the Federal Reserve, has said that the Fed will not issue a CBDC while he is in charge.

Though CBDCs could modernize legacy financial systems and make them more efficient, they would also centralize the money supply.

Magazine: Asia Express: India mulls new crypto ban to support CBDC, Lazarus Group strikes again

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Trump picks top economic adviser to temporarily fill crucial US Fed seat

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Trump picks top economic adviser to temporarily fill crucial US Fed seat

Trump picks top economic adviser to temporarily fill crucial US Fed seat

Federal Reserve Board of Governors member Adriana Kugler announced her resignation on Aug. 1, paving the way for a Trump nominee at the US central bank.

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Data sharing is the next crypto compliance frontier

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Data sharing is the next crypto compliance frontier

Data sharing is the next crypto compliance frontier

With crypto scams hitting $9.9 billion in 2024 and 90% of UK crypto apps failing AML checks, the industry needs data sharing to combat fraud.

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Chancellor doesn’t rule out raising gambling taxes after report said it could lift 500,000 children out of poverty

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Chancellor doesn't rule out raising gambling taxes after report said it could lift 500,000 children out of poverty

The chancellor has declined to rule out raising taxes on gambling after a thinktank said the move could raise £3.2bn for the public coffers and cover the cost of lifting 500,000 children out of poverty.

According to the Institute for Public Policy Research (IPPR), hiking taxes on online casinos and slot machines could raise enough revenue to fund scrapping the two-child benefit cap, with the organisation arguing that there is “no other measure which provides comparable headline child poverty reduction per pound spent”.

The proposals have been backed by former prime minister Gordon Brown, but the Betting and Gaming Council says they are “economically reckless” and could drive punters towards the black market.

The chancellor has not ruled out taking forward the proposals, telling broadcasters that a review into gambling taxes is under way, and policies will be set out at the budget in the autumn.

Money blog: Interest rate cut to lowest level in more than two years

The IPPR says in its report that the chancellor should consider increasing taxes on online casinos from 21% to 50% and raising those on slots and gaming machines from 20% to 50%, as well as raising general betting duty on non-racing bets from 15% to 25% which it said would bring other sports in line with the rates paid by horse racing.

These measures could bring in £3.2bn for the Treasury, which would cover the cost of lifting the two-child benefit cap.

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Former prime minister Gordon Brown is backing the proposals. Pic: PA
Image:
Former prime minister Gordon Brown is backing the proposals. Pic: PA

The cap was introduced by the Conservative government in April 2017, and it restricts universal credit and child tax credits to the first two children in a family, where the third or subsequent children are born after this date.

According to the thinktank’s analysis of data from the Department for Work and Pensions, 115,000 families are affected, with an average financial impact of £60 per week.

Overall, the policy is keeping over 450,000 in poverty currently, which is set to rise to 550,000 by the end of the decade, it adds.

The IPPR says raising these taxes is unlikely to reduce overall revenue for the Exchequer because firms are likely to “seek to protect their bottom lines by worsening odds”, which means a “strong possibility of higher government revenue” than their forecasts expect.

‘An investment in our children’s future’

Henry Parkes, principal economist and head of quantitative research at IPPR, said in a statement: “The gambling industry is highly profitable, yet is exempt from paying VAT and often pays no corporation tax, with many online firms based offshore. It is also inescapable that gambling causes serious harm, especially in its most high-stakes forms.

“Set against a context of stark and rising levels of child poverty, it only feels fair to ask this industry to contribute a little more.”

Progressive campaign group 38 Degrees has started a petition calling on the government to implement the proposals, and former prime minister Gordon Brown said in a statement: “Gambling will not build a brighter future for our children. But taxing it properly might just get them properly nourished. Decent clothes. A warm bed. And the full stomachs that let them fill their brains in school.

“Taxing the betting industry to support our children won’t be a gamble. It will be an investment in their future. One where everyone wins.”

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How I got caught up in AI-powered illegal gambling scam

Proposals ‘would do more harm than good’

The government has long been facing calls from its own backbenches to scrap the two-child benefit cap, and has not ruled it out doing so as part of a broader package of measures to tackle child poverty, due to be published in the autumn.

Speaking to broadcasters this afternoon, Chancellor Rachel Reeves said she speaks to the former premier “regularly”, and, like him, is “deeply concerned around the levels of child poverty in Britain”.

She continued: “We’re a Labour government. Of course we care about child poverty. That’s why one of the first things we did as a government was to set up a child poverty taskforce that will be reporting in the autumn and respond to it then.

“And on gambling taxes, we’ve already launched a review into gambling taxes. We’re taking evidence on that at the moment and, again, we’ll set out our policies in the normal way, in our budget later this year.”

But the Betting and Gaming Council says raising taxes on its members is not a sound way of funding measures to reduce poverty, with a spokesperson saying the proposals are “economically reckless, factually misleading, and risk driving huge numbers to the growing, unsafe, unregulated gambling black market, which doesn’t protect consumers and contributes zero tax”.

They added: “Further tax rises, fresh off the back of government reforms which cost the sector over a billion in lost revenue, would do more harm than good – for punters, jobs, growth and public finances.”

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