Key Points:

  • Texas state legislators are introducing a bill to ban CBDC due to cyber risk and unprecedented government surveillance.

  • Florida and Senator Cruz have already banned CBDC and expressed distrust in their implementation due to their potential danger to society.

Texas introduces bill to ban CBDC due to cyber risk and govt surveillance. Florida already banned it while Senator Cruz calls it “profoundly dangerous”.

 

Texas state legislators have introduced a bill to ban the use of a central bank digital currency (CBDC) in the state. This comes as several global leaders have expressed concern about the threat of cyber risk to financial stability, and CBDC vulnerabilities could be exploited to compromise a nation’s financial system.

The bill cites that retail CBDCs are issued to the general public, establishing a direct relationship between the Federal Reserve and consumers. This could lead to unprecedented government surveillance and control over private cash holdings and transactions.

Introducing a government-controlled digital currency has been a hot topic among government officials, with many against the idea. Florida Governor Ron DeSantis has already officially banned CBDCs within the state. At the same time, Senator Ted Cruz has also distrusted CBDCs, stating that implementing central bank-issued digital assets would be profoundly dangerous to society.

Those in favor of CBDCs argue that they could help reduce corruption, make transactions more transparent, and improve financial inclusion by providing access to banking services to those currently unbanked. However, the risks associated with CBDCs cannot be ignored, particularly regarding privacy and security risks.

The bill highlights that many CBDC proposals involve the centralized collection of transaction data, which poses major privacy and security risks, such as making it easier for intruders to access more users’ data. However, proposals that include strategies to minimize those risks often reduce transparency for regulators seeking to detect money laundering, terrorism financing, and other illicit activities.

   

WHEREAS, A number of global leaders have expressed concern about the threat of cyber risk to financial stability, and CBDC vulnerabilities could be exploited to compromise a nation’s financial system; many CBDC proposals involve the centralized collection of transaction data, which poses major privacy and security risks, such as making it easier for intruders to access the data of more users; however, proposals that include strategies to minimize those risks often reduce transparency for regulators seeking to detect money laundering, terrorism financing, and other illicit activities; and

WHEREAS, The implementation of a CBDC would make countless U.S. citizens more vulnerable to intrusive federal oversight and security threats; now, therefore, be it RESOLVED.

Texas Bill  

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