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.”
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
The Trump administration is considering 11 candidates to replace Jerome Powell; some have previously signalled a constructive stance toward crypto.
Coinbase, Kraken, Ripple, a16z and others pressed the Senate to add explicit protections for developers and non-custodial services in the market structure bill.
Reform’s plan was meant to be detailed. Instead, there’s more confusion.
The party had grown weary of the longstanding criticism that their tough talk on immigration did not come with a full proposal for what they would do to tackle small boats if they came to power.
So, after six months of planning, yesterday they attempted to put flesh on to the bones of their flagship policy.
Politics latest: Farage rows back on pledge to deport illegal migrant women and girls
At an expensive press conference in a vast airhanger in Oxford, the headline news was clear: Reform UK would deport anyone who comes here by small boat, arresting, detaining and then deporting up to 600,000 people in the first five years of governing.
They would leave international treaties and repeal the Human Rights Act to do it
But, one day later, that policy is clear as mud when it comes to who this would apply to.
Nigel Farage launched an airport-style departures board to illustrate how many illegal migrants have arrived in the UK. Pic: PA
I asked Farage at the time of the announcement whether this would apply to women and girls – an important question – as the basis for their extreme policy seemed to hinge on the safety of women and girls in the UK.
He was unequivocal: “Yes, women and children, everybody on arrival will be detained.
“And I’ve accepted already that how we deal with children is a much more complicated and difficult issue.”
But a day later, he appeared to row back on this stance at a press conference in Scotland, saying Reform is “not even discussing women and children at this stage”.
Read more:
Farage has a new ‘leave’ campaign – here’s how it could work
He later clarified that if a single woman came by boat, then they could fall under the policy, but if “a woman comes with children, we will work out the best thing to do”.
A third clarification in the space of 24 hours on a flagship policy they worked on over six months seems like a pretty big gaffe, and it only feeds into the Labour criticism that these plans aren’t yet credible.
If they had hoped to pivot from rhetoric to rigour, this announcement showed serious pitfalls.
But party strategists probably will not be tearing out too much hair over this, with polling showing Reform UK still as the most trusted party on the issue of immigration overall.
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