Bill Overview
Title: A bill to amend the Federal Reserve Act to prohibit the Federal reserve banks from offering certain products or services directly to an individual, and for other purposes.
Description: This bill prohibits a Federal Reserve bank from offering products or services directly to an individual, maintaining an account on behalf of an individual, or issuing a central bank digital currency directly to an individual.
Sponsors: Sen. Cruz, Ted [R-TX]
Target Audience
Population: Individuals with access to banking systems worldwide
Estimated Size: 250000000
- The bill affects the potential for central banks to issue digital currencies directly to individuals, a move that could impact the financial operations and personal banking options for billions globally.
- Interest in central bank digital currencies (CBDCs) is rising globally, with several countries exploring or piloting CBDCs as part of their monetary systems.
- CBDCs could offer a new form of secure, digital currency, and impact how individuals store money, make transactions, and interact with financial systems.
- Approximately 5 billion adults worldwide have access to personal banking and financial technology, representing a large portion of individuals potentially impacted by decisions on CBDCs.
- Limiting central banks from offering direct services may enforce the current reliance on traditional financial institutions.
Reasoning
- The policy affects the potential for individuals in the US to interact directly with digital currencies issued by the Federal Reserve. Thus, its impact will primarily be on people highly engaged with digital financial innovations. Most Americans might not feel an immediate difference unless they are particularly interested in the potential benefits provided by such direct interactions with CBDCs.
- Considering that this policy limits direct issuance by the Federal Reserve, it primarily maintains the status quo—where private banking maintains primary control over individual accounts and digital transactions. Therefore, individuals who heavily rely on traditional banking without a keen interest in federal innovations will likely see little to no impact.
- This policy's inclusion and impact are most relevant to 20%-30% of tech-oriented or financially progressive individuals in the US, whereas the majority, who are content with current systems or unaware of the potential changes without this policy, will perceive limited impact.
Simulated Interviews
Software Engineer (San Francisco, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I believe that central bank digital currencies could revolutionize banking by making transactions faster and more direct.
- This policy prevents a potentially beneficial technological step forward for individuals eager to engage with new financial tools.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 9 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 9 |
| Year 20 | 5 | 9 |
Bank Teller (Topeka, KS)
Age: 43 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I'm not particularly interested in digital currencies.
- This policy doesn't change much for me, as I rely on traditional banks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Freelance Artist (Brooklyn, NY)
Age: 34 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- Access to central bank digital currency might have provided competitive rates and convenience.
- This policy limits opportunities and innovation in terms of personal banking solutions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Retired (Orlando, FL)
Age: 65 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 14/20
Statement of Opinion:
- I don't use digital currencies and am satisfied with my bank.
- This policy doesn't affect my financial practices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Tech Entrepreneur (Austin, TX)
Age: 25 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 7.0 years
Commonness: 8/20
Statement of Opinion:
- A digital currency issued by the Federal Reserve could have streamlined many business operations.
- This policy creates hurdles for future technologies in finance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 9 |
| Year 3 | 7 | 9 |
| Year 5 | 7 | 9 |
| Year 10 | 7 | 9 |
| Year 20 | 7 | 9 |
Finance Professor (Boston, MA)
Age: 55 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- Developing technology like CBDCs could lead to significant leap in finance sector efficiency.
- The policy may delay vital progress in monetary transactions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 5 | 8 |
College Student (Los Angeles, CA)
Age: 19 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 13/20
Statement of Opinion:
- The concept of central bank digital currencies excites me and could change how young people manage finances.
- By not exploring this, we're potentially missing out on better solutions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Logistics Manager (Chicago, IL)
Age: 48 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 16/20
Statement of Opinion:
- I don't see the immediate need for central bank digital currencies.
- My current financial arrangements work fine as they are.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Digital Marketing Specialist (Seattle, WA)
Age: 31 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 9/20
Statement of Opinion:
- Central bank digital currencies could simplify and secure online transactions.
- The policy may keep us a step behind technological advancement in finance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 8 |
Public School Teacher (Atlanta, GA)
Age: 59 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 17/20
Statement of Opinion:
- A direct currency from the central bank isn't something I would use often.
- This policy doesn't really affect my day-to-day life.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $1500000 (Low: $1000000, High: $3000000)
Year 2: $1500000 (Low: $1000000, High: $3000000)
Year 3: $1500000 (Low: $1000000, High: $3000000)
Year 5: $1500000 (Low: $1000000, High: $3000000)
Year 10: $1500000 (Low: $1000000, High: $3000000)
Year 100: $1500000 (Low: $1000000, High: $3000000)
Key Considerations
- The potential unrealized benefits of a CBDC in terms of transaction efficiency should be considered.
- The limitation maintains conventional roles of central banks and traditional financial institutions, impacting entities differently.
- Long-term implications for financial innovation and banking competition should be monitored.