Donald Trump touched on the topic of Central Bank Digital Currency (CBDCs) recently, and he is no fan of the concept.
A digital dollar is being discussed at the US Federal Reserve and on Capitol Hill in general. The Fed has been partnering with MIT on a possible CBDC. While no decision has been made, a digital dollar could hold many characteristics of a physical dollar, except it would be held in a digital wallet.
Speaking to an audience in New Hampshire, campaigning in advance of next week’s primary, former President Trump declared to a cheering audience:
“Tonight I am making another promise to protect Americans from government tyranny. As your president, I will never allow the creation of a Central Bank Digital Currency.”
One of the biggest concerns is once the federal government has created a CBDC it will use it to monitor behaviour and perhaps use it to control behaviour. While the Feds recognize this concern and profess this will never happen, the federal government has never been good at keeping promises. And given the opportunity to have a potentially powerful tool and never use it (or abuse it), the allure can be strong.
China is already testing a digital yuan in public and has previously alluded to the potential ability to influence its population with the tool. We already know the CCCP does not consider individual rights a priority, so this should come as no surprise.
The European Union is moving in the direction of issuing a digital Euro – again claiming it would never be abused.
Of course, there are other variables in the CBDC equation.
Stablecoins, which are privately issued but regulated, is another option. And there is the fact that most dollars are really digital now. And with the new FedNow service – is a CBDC necessary?
As for Trump, he is a bit late to the game as his main rival, Governor Ron Desantis, disavowed CBDCs some time ago.