Senator Mike Lee (R-UT) has reintroduced the No CBDC Act, a bill that seeks to permanently block the Federal Reserve from creating a Central Bank Digital Currency (CBDC). This move follows an executive order by President Donald Trump to prevent federal agencies from developing a CBDC. With support from Senators Ted Cruz (R-TX) and Rick Scott (R-FL), Senator Lee aims to make the prohibition a permanent measure. "The United States doesn't need to create a Central Bank Digital Currency to know it is a bad idea," Lee said, as per the statement on his official Senate website. Rep. Andy Ogles (R-TN) expressed similar views, championing a companion bill in the House.
Project Cedar, a Federal Reserve initiative from the Biden Administration to explore the potential for a CBDC in the U.S., could significantly shift the financial landscape. Critics argue that such a move would not just change the game for how financial institutions operate, but it would also enable the government to closely monitor all transactions made with CBDCs.
The debate around the potential dangers of a CBDC traverses the corridors of privacy, civil liberties, and economic freedom. Opponents of a government-controlled digital currency like Yaël Ossowski, deputy director of the Consumer Choice Center, have serious concerns about the implications it could carry. "A Central Bank Digital Currency creates a fully traceable and controllable digital money that has dastardly implications for civil liberties and economic freedom," said Ossowski, according to the press release. He argues that unlike Bitcoin, which separates money and state, CBDCs merge those powers in a manner open to abuse.
David Williams, president of the Taxpayers Protection Alliance, commended Lee for his strong leadership in opposing the creation of a federally issued CBDC, calling it a significant threat. Across the board, the application of this legislation seeks to maintain a boundary between individual liberties and governmental oversight. The bill's proponents believe it is crucial to not just question, but to directly challenge, the authority of the executive branch in this financial domain.
