Senators from the United States have redoubled their efforts to undermine any dollar-based central bank digital currency (CBDC).
The CBDC Anti-Surveillance State Act was introduced yesterday by Republican senators Ted Cruz, Bill Hagerty, Rick Scott, Ted Budd, and Mike Braun.
Their proposal is completely unyielding. A modification to the Federal Reserve Act establishes that no Federal Reserve bank shall provide direct products or services to individuals, hold accounts on their behalf, or issue digital currencies or assets that bear a substantial resemblance to those offered or labeled by the central bank to individuals under any other name or label.
The Federal Reserve cannot use CBDCs to execute monetary policy or issue them indirectly, as outlined in the following sections.
The last section of the bill states that existing stablecoin issuers of cryptocurrencies are exempt from the proposed prohibitions.
As a result, “this Act and the modifications enacted by this Act shall not apply to any dollar-denominated money that is open, permissionless, and private, and fully retains the privacy safeguards of United States coins and real cash. This means that dollar currencies like Tether and Circle are exempt from the regulations passed by Congress.”
Ted Cruz, a senator from Texas, made the following statement in a press release: “The Biden administration is eager to violate our freedom and invade the privacy of individuals by monitoring their spending habits. That is why Congress needs to make it clear that the Federal Reserve does not have the power to establish a CBDC.”
Since its introduction in 2022, Senator Elizabeth Warren has been attempting to have Congress pass her anti-money-laundering (AML) DAAMLA legislation.
Those who disagree with her position, such as the US-based crypto advocacy organization the Chamber of Digital Commerce (CDC), argue that her proposed regulations on cryptocurrency miners and validators are too severe and might lead to the collapse of the sector as a whole.
As cryptocurrency becomes a stumbling block in the presidential contest this year, the argument surrounding DAAMLA has recently increased, mirroring the debate around CBDCs.
In its second letter to the House Financial Services Committee and the Senate Banking Committee, the Blockchain Association, a Washington-based lobbying organization, voiced its concerns with DAAMLA.
Eighty people signed the letter, including several retired military, police, and intelligence officers. The previous November, forty people signed a letter.
French Hill, US Congressman and chair of the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion, recently brought attention to the fact that miners and validators do not interact directly with consumers but rather provide a critical service for the operation of blockchain networks, and that it would be counterproductive to subject them to stricter reporting requirements.
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