US Senator Ted Cruz proposed a bill on March 26 to prohibit the Federal Reserve from issuing central bank digital currency (CBDC). His "Anti-Surveillance CBDC Act" aims to prevent the Fed from providing direct products or services to US citizens, a key element of any CBDC. This Republican bill from Texas can be seen as a companion bill to the anti-CBDC legislation by Minnesota Republican Representative Tom Emmer, reintroduced on March 6. Both bills affirm that the ban should not include any USD-based currencies that are open, permissionless, and privacy-protecting, similar to US coins and paper money.
Since 2020, the Federal Reserve has been researching a digital version of the US dollar. CBDC tracking has identified at least four research projects currently being conducted by Fed entities. Cruz has consistently opposed CBDC since 2022, when he introduced legislation to prevent the Fed from directly offering CBDC to consumers. Subsequently, he continued with similar laws in 2023, and in 2024 attempted to block the then-President Joe Biden administration's efforts to create a CBDC.
In line with Cruz, Emmer stated in a Congressional hearing that CBDC technology is "inherently incompatible with the United States" and warned that allowing unelected officials to issue a CBDC could "disrupt the American way of life." Although CBDC has some purported benefits, these technology critics have long argued that directly issued digital currency could infringe on privacy and expand government power.
However, some countries and regional governments are still exploring this technology. While European consumers show little interest in CBDC, legislators in the region are pushing to create a digital Euro. Israel has announced a preliminary design for a digital shekel, and Iran will deploy a CBDC in the near future. In the US, creating a CBDC has faced significant opposition. President Donald Trump promised he would "never allow" a domestic CBDC, and Jerome Powell, Federal Reserve Chairman, has affirmed that the Fed will not issue a CBDC during his tenure. While CBDC could modernize the long-standing financial system and make it more efficient, they would also centralize the money supply.
