A CBDC is a central bank-issued digital version of fiat money. CBDCs are intended to be a more efficient and secure means of transacting, and they have the potential to replace cash and conventional bank deposits.
Texas State Senator Ted Cruz presented legislation on May 12, 2023, to prohibit the Federal Reserve from introducing a central bank digital currency (CBDC). SB 1449 has been referred to the Senate Business and Commerce Committee.
Cruz claims that CBDCs would offer a multitude of concerns to consumers and the economy, including the following:
Increased government surveillance: CBDCs would provide the government unparalleled access to people's financial transactions, resulting in increased government monitoring.
Financial insecurity: CBDCs might be used to establish a "digital dollar" that competes with private currencies, resulting in financial insecurity.
Inflation: CBDCs may be used to fund government expenditures, which may result in inflation.
Senator Cruz's measure has received mixed reviews. Some analysts believe that CBDCs might offer a variety of advantages, including making it simpler for individuals to obtain financial services and lowering transaction costs. Others feel that the hazards outweigh the advantages of CBDCs.
It is too soon to tell if Texas' measure will become law. It is, however, indicative of the rising discussion about the possible hazards and advantages of CBDCs.
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