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Following a Trump executive order that prohibits the US government from issuing a central bank digital currency (CBDC), a Utah senator wants the ban to go one step further.
Last week, Senator Mike Lee (R-UT) introduced a bill that would enact a CDBC ban in legislation, therefore making the ban in Trump’s executive order “permanent”.
Lee’s No CBDC Act is a two-page bill that would introduce a single passage of text to the Federal Reserve Act of 1913.
This passage would spell out explicitly that no Federal Reserve bank or the Treasury may “mint or issue” a CBDC, whether to individual users or to intermediaries.
These same agencies must also refrain from offering CBDC-“related products or services” either to individuals or intermediaries, including through the maintenance of CBDC accounts.
Lee said he introduced the bill primarily on privacy grounds, noting that CBDC has been used by the Chinese government to financially surveil and censor its citizens.
“The US doesn't need to create a CBDC to know it is a bad idea,” he said.
“We've seen this play out in China with the digital yuan. In early trials, China canceled its citizens' money after a set period, forcing Chinese citizens to spend their savings at the compulsion of the government.
“My bill protects Americans from a similar intrusion by prohibiting the Federal Reserve or any federal government agency from minting or issuing a CBDC.”
The bill names Senator Ted Cruz (R-TX) as an original co-sponsor. It is also supported by lobby groups Heritage Action, Consumer Choice Center and Taxpayers Protection Alliance.
