Yesterday, former US President Donald Trump threw a jab at the prospects of CBDCS (Central Bank Digital Currencies) in the United States. Trump unequivocally stated that if elected president, he would shut the door to creating any Central Bank Digital Currency. The Republican favorite, who has always had a personality and a reputation for being upfront about his political views, made the bold promise in his New Hampshire rally after a landslide victory in the Iowa Republican Caucuses a day prior.
What’s the Latest With CBDCs in the US?
While the US has no Central Bank Digital Currency at the moment, there’s heavy speculation about the prospects of one, especially as regulatory authority chiefs are still aggressive in their opposition to cryptocurrency. Top voices in the financial sphere attribute cryptocurrencies to money laundering and terrorism, from SEC stakeholders to Wall Street firm CEOs. The closest alternative to these criminalized crypto would be CBDC, but why isn’t the US running one yet?
President Joe Biden gave an executive order in 2022 mandating the Office of Science and Technology Policy to make a report on the benefits and risks of creating a virtual US dollar. Shortly after the order, the Federal Reserve issued a discussion paper analyzing the pros and cons of a potential CBDC. The process involved collecting feedback from people on CBDC-related topics.
From the report, supporters said the introduction of CBDCS could potentially help with cross-border interoperability, scale with new business models, increase dollar dominance, and strengthen financial inclusion for the typical American.
On the other hand, commenters opposed to CBDCs cited privacy violations as one of the potential risks. Similarly, such a currency hands the government too much power over the citizens’ finances via monetary policies, which aligns with Trump’s statement.
At the moment, there is no concrete framework for US CBDCs. The Federal Reserve is still in some feasibility study to see how the American public perceives it and its effect on the ordinary citizen.
Is There Any Hidden Motivation Behind Trump’s Potential Ban on CBDCs?
Trump has always been outspoken about his policies pre-election and has stayed faithful to his promises before his first office as president. In a tweet, American Entrepreneur and politician Vivek Ramaswamy said he has “full confidence he will keep” the promise.
“Tonight, I am also making another promise to protect Americans from government tyranny. As your president, I will never allow the creation of a Central Bank Digital Currency. Such a currency would give the federal government absolute control over your money,” said Trump.
According to Trump, such state-run virtual currencies “would be a dangerous threat to freedom.” The Republican chieftain added that his administration will put strong protections against banks and regulators trying to “de-bank” citizens because of their political beliefs.
Trump’s recent promise to stop CBDCs seems like him unapologetically standing up for the people again. His stance against CBDCs is to give the people back their financial freedom and eliminate unnecessary political control over people’s funds.