CBDCs are designed to ‘destroy all the value of Bitcoin’: US Senator Ted Cruz

Introducing a central bank digital currency (CBDC) would be “profoundly dangerous” to society, as it would mean the government had visibility into every single transaction of its citizens, according to Texas Senator Ted Cruz.

“I am very concerned about the risk of a CBDC,” Cruz stated during the Bitcoin Policy Summit on Wednesday.

Drawing parallels between President Joe Biden’s executive order directing the Federal Reserve to explore the launch of CBDC and China’s experiments with the digital yuan, Cruz said the intent of using a CBDC is “to destroy all value of Bitcointo destroy anonymity, to destroy decentralization.”

CBDCs share some similarities with stablecoins in that they are tied to the value of a sovereign currency, such as the US dollar. However, there is a crucial distinction between the two: CBDCs are issued and managed by national governments or central banks, while stablecoins are created by private entities on decentralized networks, such as Tether’s USDT or Circle’s USDC, the two largest stablecoins by market capitalization.

“The same people who want to see a CBDC, they hate Bitcoin, and they hate cash,” the Texas lawmaker said. “Let’s be clear, they don’t like cash for exactly the reason I like cash because it’s not subject to centralized control that isn’t subject to constant surveillance. And then I hope we see growing opposition to a CBDC.”

Cruz reveals personal investment in Bitcoin

Cruz also praised Bitcoin, which he said he is “incredibly excited and incredibly bullish on.”

“Bitcoin is clearly the alpha in the current cryptosphere, both in being first and also being clearly the most dominant,” he said. “I think the analogy of digital gold is powerful and the insight that led to his creation remains extraordinary.”

Cruz also revealed that he personally invests in the leading cryptocurrency, and has a standing order every Monday.

“I own a little more than two bitcoins and I want a little more. I bought the dip, which I was quite happy with, but I’m also a long-term investor,” Cruz said. “I’m fine with a little volatility.”

According to him, one of the attractions of Bitcoin is that it has a limited supply of 21 million coins, suggesting that it acts as a hedge against inflation-one especially important feature “when you have irresponsible politicians in Washington spending money like drunken sailors,” he said.

“Which is actually not fair to the sailors because at least they’re spending their own money,” Cruz added.

Stop the government

Last month, Cruz introduced legislation in March to prohibit the Fed or the federal government from creating a CBDC, stating at the time that the US government had “no authority to unilaterally establish a central bank currency.”

“I don’t want the government to have control over your finances,” Cruz said at yesterday’s event, adding that one element of President Biden’s legislative initiative was a requirement for banks to report every single transaction over $600 to the federal government.

“That means you pay rent every month. If you own a home, that means you pay the mortgage every month. If you own a car, most car payments are now north of $600. It is literally the government that has visibility into virtually every transaction you make. That is their stated goal,” Cruz said.

According to him, decisions like these should be made by the Congress elected by the people, not by the “Federal Reserve governors who have no accountability to the American people.”