In a recent development, Republican senators have put forward a bill to ban digital currencies backed by central banks. This move could potentially hinder the Joe Biden administration’s exploration of the technology.
What Happened: GOP senators have proposed a bill that would ban the use of official cryptocurrencies supported by central banks. These digital assets, known as Central Bank Digital Currencies (CBDC) or stablecoins, have been under the Biden administration’s scrutiny and the Federal Reserve’s study, reported The Hill.
The senators argue that Fed-backed cryptocurrencies could infringe on privacy rights by giving regulatory authorities access to individual Americans’ spending habits. Sen. Ted Cruz (R-Texas) referred to CBDCs as “programmable money” that could provide the federal government with significant transaction-level data.
The Biden administration has shown interest in cryptocurrencies since 2022, issuing an executive order to study the technology and its potential incorporation into the economy. However, the White House has not explicitly endorsed the creation of a CBDC, and Fed Chair Jerome Powell stated that the central bank would not create one without ...