US Senator Suggests Banning Fed From Issuing a Direct-to-Consumer CBDC

cryptonews.com:

US Senator Ted Cruz has introduced companion legislation to a January 2022 bill drafted by Representative Tom Emmer, which prohibits the Federal Reserve (Fed) from issuing a central bank digital currency (CBDC) directly to individuals.

The legislation bans the Fed from developing a direct-to-consumer CBDC that “could be used as a financial surveillance tool by the federal government, similar to what is currently happening in China,” Emmer’s office said in a statement. 

“The bill aims to maintain the dollar’s dominance without competing with the private sector,” it said.

According to Cruz’s bill,

‘‘No Federal reserve bank may offer products or services directly to an individual, maintain an account on behalf of an individual, or issue a central bank digital currency directly to an individual.” 

The senator said in a statement that his bill was designed to make ‘‘sure big government" does not try to centralize and control cryptoassets "so that it can continue to thrive and prosper in the United States." He added that "we should be empowering entrepreneurs, enabling innovation, and increasing individual freedom—not stifling it.”

Cruz and Emmer are both members of the Republican Party, representing the states of Texas and Minnesota, respectively.

Commenting on his party colleagues’ initiative, Emmer said he was  “glad" Cruz has agreed to offer "a Senate companion to my legislation limiting the Fed’s authorities," adding: 

"The Fed must only craft a CBDC framework that is open, permissionless and private."

This said, some crypto industry observers are not sharing the representative’s enthusiasm for the draft legislation.

John Carvalho, CEO of crypto software provider Synonym, remarked that,

“Nothing centrally issued can be