Senator Lee introduced legislation to prevent the Federal Reserve from reshaping the U.S. financial sector and spying on every consumer transaction. The Fed, with encouragement from the Biden Administration, has begun to develop a central bank digital currency (CBDC), a cryptocurrency, minted, issued, and controlled by them, that would alter the ability of financial institutions to function as lenders, while giving the federal government knowledge of every purchase that uses a CBDC. Financial institutions could no longer offer loans since they would bear no risk for a deposit – they would function merely as wallets, holders of a CBDC – and as such, could not extend deposits to prospective borrowers in the form of loans. Moreover, since the Federal Reserve would be the sole operator and overseer of a U.S. CBDC, the bank would have knowledge of every purchase using the cryptocurrency; if it maintains the technology needed to create the CBDC, it will know how it is used.
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