Senators Ted Cruz, Bill Hagerty, Rick Scott, Ted Budd and Mike Braun filed a bill titled “The CBDC Anti-Surveillance State Act.”

Republican senators have introduced legislation aimed at blocking a CBDC in the U.S.

The lawmakers say the “Biden administration salivates at the thought of infringing on our freedom and intruding on the privacy of citizens to surveil their personal spending habits …”

Republicans have tried to introduce such legislation several times in the past.

Yet again, Republican lawmakers have introduced legislation to block efforts to introduce a central bank digital currency (CBDC) in the U.S. on concerns a digital dollar would impinge on personal privacy.

On Monday, U.S. Sen. Ted Cruz (R-Texas), joined by Sens. Bill Hagerty (R-Tenn.), Rick Scott (R-Fla.), Ted Budd (R-N.C.), and Mike Braun (R-Ind.), filed legislation titled “The CBDC Anti-Surveillance State Act.”

“The Biden administration salivates at the thought of infringing on our freedom and intruding on the privacy of citizens to surveil their personal spending habits, which is why Congress must clarify that the Federal Reserve has no authority to implement a CBDC,” Cruz wrote in a post on his website.

CBDCs have become a presidential election issue or at least a campaign talking point, even though President Joe Biden’s administration has not made any declaration on the topic. The Federal Reserve would be the issuing institution, and is only in the basic research phase. Fed Vice Chairman for Supervision Michael Bar has said the Fed won’t take a step forward without signoff from the White House and an authorizing bill from Congress.

Former President Donald Trump, the front-runner in the Republican leadership race, has promised to ban the creation of a CBDC.

In September 2023, at least one Democrat, Rep. Stephen Lynch (D-Mass.) reintroduced a bill calling for a digital dollar pilot explaining that “Russia, China, and nearly 130 countries worldwide already researching and launching some form of CBDCs,” and thus it is “absolutely critical” for the U.S. to take this step.

Republicans have tried to head off a CBDC on several occasions, including the Digital Dollar Pilot Prevention Act pushed by Rep. Alex Mooney (R-W.V.), Rep. Tom Emmer’s (MN-06) CBDC Anti-Surveillance State Act, and Ted Cruz’s first legislation against a CBDC.

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The pilot will see the central bank identify the practical application of a national stablecoin and come up with a design to simulate its circulation

The Central Bank of Montenegro (CBCG) plans to develop a central bank digital currency (CBDC) pilot with blockchain provider Ripple.
The pilot will see the central bank identify the practical application of a national stablecoin and come up with a design to simulate its circulation, Ripple announced on Tuesday.

The project will “analyze the advantages and risks that CBDCs or national stablecoins could pose concerning electronic means of payment availability, security, efficiency, compliance with regulations, and most importantly, the protection of end users’ rights and privacy,” CBCG Governor Radoje Zugic said in the statement.

Over 100 countries are exploring the development of a CBDC – a digitized form of central bank money for use by the public – with some having entered a practical phase.

Montenegro is a member of the European Union (EU) and part of the eurozone, so would see the adoption of a digital euro if one is introduced by the European Central Bank (ECB) . The ECB is scheduled to make a decision on whether to do so later this year.

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ANZ partnered with Grollo Carbon Ventures to trade Australian Carbon Credit Units (ACCUs).

Australia and New Zealand Banking Group Limited (ANZ) has completed the first use-case of carbon credit trading as part of Australia’s central bank digital currency (CBDC) pilot, the Melbourne headquartered bank announced on Wednesday.

Australia’s CBDC pilot, run by the Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC), began last year to explore use cases for a CBDC. The DFCRC is a 180 million Australian dollar (US$124.3 million) program, funded by industry partners, universities and the Australian Government.

ANZ partnered with Grollo Carbon Ventures to trade Australian Carbon Credit Units (ACCUs), which are issued by the Australian Government’s Clean Energy Regulator.

ANZ and GCV tested real-world ACCUs by first tokenizing existing ACCUs. ANZ’s own stablecoin (A$DC) was then used to purchase the tokenized ACCUs. Australia’s Pilot CBDC was used as a risk-free asset to support the issuance of A$DC, the announcement said.

Tokenization of carbon markets can reduce settlement time and partnership risk and incentivise investment in climate solutions.

The RBA has revealed a set of projects to test use cases for its cbdc and partners for the pilot projects include Mastercard, Monoova, the Australian Bond Exchange, DigiCash, Commonwealth Bank and others.

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The first phase of the Digital Dirham is expected to be completed over the next 12 to 15 months.

The United Arab Emirates expects to complete the first phase of its central bank digital currency strategy around mid-2024, its central bank announced on Thursday. This includes proof-of-concept work for a wholesale and retail CBDC.

The Central Bank of UAE (CBUAE) also revealed an engagement with G42 Cloud, a cloud platform from the region, and New York-based blockchain firm R3 as the infrastructure and technology providers respectively.

The first phase of the CBUAE’s CBDC (The Digital Dirham) is expected to be completed over the next 12 to 15 months and will include three major pillars, the announcement said.

The first pillar is the soft launch of the ongoing project mBridge, a collaboration between the Bank for International Settlements (BIS) and the central banks of Hong Kong, the Chinese mainland, the United Arab Emirates and Thailand to study cross-border payments and multi-CBDC transactions.

The second pillar is proof-of-concept work for a bilateral CBDC bridge with India and the third is proof-of-concept work for a domestic wholesale and retail CBDC, the plans for which were first announced last month.

The UAE had announced its digital dirham as one of nine key initiatives of its new Financial Infrastructure Transformation Program at a time when central banks all over the world have been working towards exploring CBDCs.

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The effort by the Texas senator adds to a similar state-level measure proposed earlier this week by Florida Gov. Ron DeSantis.

Sen. Ted Cruz (R-Texas) introduced a bill on Tuesday aimed at blocking the Federal Reserve from creating a consumer-based central bank digital currency, or CBDC.

“The federal government has no authority to unilaterally establish a central bank currency,” Cruz said in a press release. “This bill goes a long way in making sure big government doesn’t attempt to centralize or control cryptocurrency and instead, allows it to thrive in the United States.”

The bill was cosponsored by Sens. Mike Braun (R-Ind.) and Charles Grassley (R-Iowa).

Earlier this week, Florida Gov. Ron DeSantis, who is a likely GOP presidential candidate, introduced a bill to prohibit the use of a national CBDC in Florida.

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Central bank digital currencies have the potential to revolutionize global financial systems, the report said.

Digital currencies, such as central bank digital currencies (CBDCs) and stablecoins, are the natural evolution of money and payments, Bank of America (BAC) said in a research report on Tuesday.

“CBDCs do not change the definition of money, but will likely change how and when value is transferred over the next 15 years,” analysts led by Alkesh Shah wrote, adding that central bank digital currencies have “the potential to revolutionize global financial systems and may be the most significant technological advancement in the history of money.”

CBDCs typically use blockchain technology to increase efficiency and lower costs. A stablecoin is a type of cryptocurrency whose value is pegged to another asset, such as the U.S. dollar or gold.

The benefits and risks of CBDCs depend on their design and issuance, but Bank of America expects central banks in developed and developing economies to focus on payments efficiency and financial inclusion, respectively.

Still, CBDCs are not without their risks. They may drive competition with bank deposits, and could lead to a loss of monetary sovereignty and inequality among countries globally, the note said.

CBDC issuance may not happen for over a decade for some counties, but central banks are expected to “adopt technological advances or risk irrelevance over the longer term,” the note added.

Bank of America says central banks and governments are expected to drive digital asset innovation by leveraging the private sector.

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A pilot for a retail version will start within a month.

India’s central bank will introduce a pilot wholesale central bank digital currency (CBDC) Nov. 1, and a retail version will start within a month.

In a statement, the Reserve Bank of India said the use case for the wholesale digital rupee is the “settlement of secondary market transactions in government securities” since it would reduce transaction costs.

Nine prominent banks have been identified for participation in the pilot. These are State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.

The RBI said a pilot of the retail version is planned for launch within a month in select locations in closed user groups comprising customers and merchants.

The Reserve Bank of India (RBI) published a 50-page concept note for the introduction of a central bank digital currency earlier this month.

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The HKMA issued a discussion paper in April inviting views on they key issues surrounding CBDCs

The Hong Kong Monetary Authority (HKMA) plans to start trials of its central bank digital currency (CBDC) in the fourth quarter of this year, the South China Morning Post (SCMP) reported Tuesday, citing a media briefing.

Hong Kong’s de facto central bank now plans to lay the technology and legal foundations to support the development of “e-HKD” while exploring the use cases and design issues related thereto by conducting a series of pilots.

HKMA issued a discussion paper in April inviting views on they key issues surrounding CBDCs. It received 75 responses from a range of entities, including industry bodies, fintech firms, financial institutions and tech companies.

“Overall, the respondents are supportive of the e-HKD initiative and believe that e-HKD has the potential to make payments more effective while supporting the digital economy,” the HKMA said on Tuesday.

“At the same time, the respondents also pointed out the need to further examine issues such as privacy protection, legal considerations, and use cases.”

The central banks of almost every major economy worldwide are studying or developing CBDCs, partly as a means of future-proofing their currencies from potential threats posed by privately issued digital currencies.

China is leading the way with its “e-CNY” which had 260 million individual users as of January this year, with its trialling set to extend to four of the country’s largest provinces in the near future.
Hong Kong has its own financial and judicial systems, separate from the Chinese mainland as part of the “One Country, Two Systems” framework under which Hong Kong is governed.

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The funding program will support research at two of Asia’s most highly ranked technology schools.

SEOUL, South Korea — Blockchain protocol Klaytn has committed $20 million over four years to support blockchain development and funding at the Korea Advanced Institute of Science and Technology (KAIST) in Seoul and the National University of Singapore (NUS).

NUS ranked top worldwide in Coindesk’s 2021 University Rankings for Blockchain and KAIST placed 26th. Both are in the top 50 technology schools globally, according to QS World University Rankings, and are known in Asia for their strong science, technology, engineering and mathematics programs.

Klaytn, introduced by messaging app Kakao’s blockchain arm Ground X, went live in 2019 and now has “millions of users in Korea,” it said. Its KLAY token has over $880 million market cap, CoinGecko data show, making it the 66th largest cryptocurrency. Its governing body at launch included electronics giant LG, with crypto exchange Binance and South Korea’s Shinhan Bank joining later.

The blockchain is the second to announce an academic funding program this month. Earlier in August, the Algorand Foundation named the winners of its $50M blockchain research and education program, including Yale, University of Cape Town and Monash University in Australia.

Klaytn Foundation director Sangmin Seo announced the funding, called the Blockchain Research Center (BRC) Program, at Korea Blockchain Week in Seoul on Monday. Seo said the commitment is one of the largest blockchain research programs in terms of funding grants.

Day-to-day operations will be run by a global team headed by KAIST and NUS researchers. BRC will operate in an open-source manner, where research conducted will be publicly disclosed as research papers or open-source software.

External researchers will also be able to participate in existing research projects or submit their own proposals.
Seo said KAIST and NUS were selected from a pool of participating research institutes who submitted a proposal. Seven proposals were received from 62 research institutes in 11 countries, Seo said. The KAIST and NUS research group was selected by the Klaytn Governance Council.

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Australia’s central bank plans to create a CBDC that will operate in a ring-fenced environment

The Reserve Bank of Australia (RBA) will develop a “limited-scale” pilot to explore use cases and potential economic benefits of a central bank digital currency (CBDC).

Australia’s central bank plans to create a CBDC, which will operate in a ring-fenced environment. A ring-fence environment separates a portion of the user’s financial assets from the rest, potentially securing one from the other in case of a breach.

The project will take about a year to complete, according to an announcement on Tuesday.

In 2020, the RBA announced its intention to explore a potential CBDC with the development of a proof-of-concept (POC) for the issuance of a tokenized digital dollar for use by the wholesale market. Attention is now being turned to a potential CBDC for use by households and businesses.

While the central banks of almost every developed economy are at least exploring rolling out a CBDC, the jury is somewhat out on the necessity or desire for one in places like Australia, which the RBA acknowledges.

“A question that has received less attention to date, especially in countries like Australia that already have relatively modern and well-functioning payment and settlement systems, is the use cases for a CBDC and the potential economic benefits of introducing one,” the central bank said.

With China’s “eCNY/” being fairly well established and having received mainstream extended trials at the Winter Olympic Games in February, central banks elsewhere want to make sure they are not being left behind in the digital currency race.

The RBA will publish a paper in the next few months detailing its objectives for the projects and interested industry bodies will be able to participate.

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