Congressman Warren Davidson has taken to X to criticize Central Bank Digital Currency (CBDC), describing these types of digital assets as an “existential threat to Western civilization.”
Central Bank Digital Currency (CBDC) is an existential threat to western civilization.@FinancialCmte passed a bill to ban them. Needs to get a vote by the House and survive final passage. We also have an amendment to appropriations that bans all federal funds from being used to…
— Warren Davidson 🇺🇸 (@WarrenDavidson) February 20, 2024
There is an amendment to existing legislation that blocks the US Department of Treasury from spending money on researching or developing a digital dollar. Currently, there is a Treasury-led CBDC Working Group that is working in parallel to the US Federal Reserve’s research on a CBDC.
Davidson sits on the House Financial Services Committee and has been a long-time proponent of digital assets – with the exception of CBDCs.
While there has been a good amount of debate on governments issuing digital currency such as a digital dollar, there are profound privacy concerns. While a government may be quick to deny abusing control or information generated from a CBDC, past experience of government abuse is good cause for concern. China, already testing a digital Yuan, has openly discussed the control a CBDC could provide.
One alternative to a CBDC is regulated stablecoins. Effectively, a private firm issues a digital dollar adhering to strict regulation without handing it over to a central government where the lure to monitor or control a user’s activity could be mitigated.