Following the lead of Republican contender for the party’s presidential candidate slot, U.S. Senators and the governor of South Dakota take shots at President Biden’s baby steps toward a digital dollar.
At the federal and state levels, conservative Republican officials are taking aim at the possibility of President Biden’s administration moving forward with the introduction of a Central Bank Digital Currency (CBDC). The Biden administration released a plan in October 2022 including Treasury Department testing to develop a safe and stable electronic means of exchange. This testing, especially in conjunction with commercial banks, has been ongoing.
While there is some ambiguity among Republicans regarding the use of cryptocurrencies such as Bitcoin, with ex-President Trump being not against it, and some lawmakers such as South Dakota governor Kristi Noem being in favor of the right to use crypto. Financial conservatives take a different approach to crypto. However, the party has rallied around defending the American people, as they see it, from the government simply logging onto a computer and either spying on citizen’s money trails, or shutting down a person’s accounts.
Republican opposition
The reaction to the administration’s efforts to test a CBDC began in earnest in 2023. Concerns over the invasion of privacy, government overreach, and a change in the relationship between the users of currency and the Treasury Department were cited as reasons for not pursuing the digital dollar.
In September 2023, the U.S. House of Representatives Financial Services Committee worked on the details of two bills aimed at preventing different facets of CBDCs from seeing light. One forbids the Federal Reserve from beginning CBDC test programs without approval from Congress. The other amends the Federal Reserve Act. The amendment limits the Fed’s ability to offer products or services directly to an individual. Furthermore, any CBDC rollout would have to wait for Congressional approval. Another wave of dissent appeared in December 2023.
The latest wave
At the end of February 2024, Republican congresspeople began another wave of complaints. Texas Republican Sen. Ted Cruz, ranking member on the Senate Commerce Committee, told FOX Business that he and four Senate colleagues, including Bill Hagerty of Tennessee, Rick Scott of Florida, Ted Budd of North Carolina, Mike Braun of Indiana, and Kevin Cramer of North Dakota, would introduce a bill to prevent the Treasury Department from unilaterally redefining relations between banks and with individuals. In terms of the latter, the senators’ base sees the possibility of redefining relations, especially with individuals, and gaining the ability to increase control over the people by being able to close their account or audit their bank accounts at will.
South Dakota forbids CBDC use
On February 27, South Dakota governor Kristi Noem signed two bills that block a Central Bank Digital Currency (CBDC) from being utilized in South Dakota. The governor claimed that a bill she vetoed in 2023 impeded the right of citizens to use cryptocurrency and “opened the door to the risk that the federal government could adopt a Central Bank Digital Currency (CBDC).”
In a press release announcing her signing into laws including one forbidding the use of a CBDC in South Dakota, she said,
“In South Dakota, we will always protect the economic Freedom of our people,” said Governor Noem. “I VETOED last year’s UCC bill because it limited economic Freedom and put South Dakotans at risk. I’m proud that we have been able to work together over the past year to create legislation that prioritizes our people, their security, and their Freedoms.”
