Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—Cruz introduces bill to bar Fed from issuing CBDC, (Mar 28, 2025)

By Nora Macaluso

The senator said the legislation has the support of several banking groups.

Sen. Ted Cruz (R-Tex.) introduced a bill that would prohibit the Federal Reserve from issuing a central bank digital currency. Senators Ted Budd (R-NC), Kevin Cramer (R-ND), and Thom Tillis (R-NC) co-sponsored the bill.

“Cryptocurrency represents financial freedom, innovation, and privacy,” Cruz said. “A Central Bank Digital Currency (CBDC) would undermine these core values, erode privacy, and stifle innovation.” Cramer said a central bank CBDC “could turn the Federal Reserve into a retail bank” and the legislation ensures that Congress is not “circumvented.” Tillis said a CBDC, “if misused, could become a surveillance tool that threatens individual freedoms and free market principles.”

Cruz further said the bill is endorsed by America First Policy Institute, American Bankers Association, Americans for Tax Reform, America’s Credit Unions, Bank Policy Institute, Blockchain Association, Center for a Free Economy, Center for Freedom and Prosperity, Club for Growth, Consumer Bankers Association, Heritage Action, Independent Community Bankers of America, Project for Privacy & Surveillance Accountability, Restore the Fourth, Small Business & Entrepreneurship Council, Digital Chamber, Association of Mature American Citizens, and Crypto Council for Innovation.

ABA President and Chief Executive Officer Rob Nichols said the bill protects the economy and the financial system. “A central bank digital currency would fundamentally change the relationship between citizens and the Federal Reserve, and would undermine the essential role that banks play in extending credit and driving economic growth,” he said.

Emmer bill. House Majority Whip Tom Emmer (R-Minn.) introduced a similar bill in the House (see Banking and Finance Law Daily, Mar. 7, 2025). That bill, similar to legislation Emmer introduced in 2022, would prevent the federal government from being able to “surveil Americans’ transactions and choke out politically unpopular activity,” he said.

Emmer, in introducing his bill, was careful to distinguish the CBDC from decentralized cryptocurrencies, which the Trump administration has supported. Emmer said his bill is intended to prevent the Fed from issuing a CBDC directly to individuals, which Emmer warned could allow the Fed to "mobilize itself into a retail bank with the ability to collect personal financial data on Americans."

STABLE Act. Meanwhile, House Financial Services Committee Chairman French Hill (R-Ariz.) and Rep. Bryan Steil (R-Wis.) introduced the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, which seeks to establish a framework for the issuance and operation of dollar-denominated payment stablecoins in the U.S. Hill and Steil had released a discussion draft of the legislation last month (see Banking and Finance Law Daily, Feb. 7, 2025).

Companies: American Bankers Association; America’s Credit Unions; America First Policy Institute; Americans Tax Reform; Association of Mature American Citizens; Bank Policy Institute; Blockchain Association; Center a Free Economy; Center Freedom and Prosperity; Club Growth; Consumer Bankers Association; Crypto Council Innovation;Digital Chamber; Heritage Action; Independent Community Bankers of America; Project Privacy & Surveillance Accountability; Restore the Fourth; Small Business & Entrepreneurship Council

LegislativeActivity: BankingOperations BankSecrecyAct Blockchain DepositInsurance FederalReserveSystem FinancialStability FinTech