In a surprising twist, the always controversial and ever-popular former President Donald Trump has found a new rallying point for his political base ahead of the 2024 presidential election – central bank digital currencies (CBDCs). The former Wrestlemania star turned politician made the bold declaration during a rally in Portsmouth, New Hampshire, where he expressed concerns over the potential threats CBDCs pose to individual freedoms.
“Such a currency would give a federal government, our federal government, the absolute control over your money,” Trump declared, suggesting that CBDCs could allow the government to discreetly seize funds without individuals even realizing it. In the midst of his E. Jean Carroll defamation damages trial, Trump took a moment to promise that his actions against CBDCs would “protect Americans from government tyranny.”
While Trump’s stance may seem surprising given his previous skepticism towards cryptocurrencies, his concerns strike a chord with a subset of the population, including conspiracy theorists, libertarians, and some crypto enthusiasts who fear the encroachment of government control.
The US Libertarian Party, for example, has been vocal in its opposition to CBDCs, arguing that they could give the government unprecedented power to confiscate wealth and violate privacy. This sentiment aligns with the broader crypto community’s preference for decentralized assets like Bitcoin, which operate independently of government regulation.
Despite his newfound concern about CBDCs, Trump has a history of being a crypto-skeptic, as evidenced by his past tweets criticizing electronic cash. This apparent flip-flop on the issue suggests that the debate over CBDCs has evolved into a nuanced and politically charged discussion.
At present, the US does not have a concrete plan for issuing CBDCs, but it has been actively working on a regulatory framework for digital assets. Federal Reserve governor Michelle Bowman and chairman Jerome Powell have both emphasized that any decision to implement a US CBDC would require approval from Congress.
Bowman acknowledged the ongoing discussions around CBDCs and expressed some optimism about the potential applications of wholesale CBDCs for financial market transactions and international payments. However, she cautioned against the widespread adoption of CBDCs for uses beyond interbank and wholesale transactions, citing concerns about tradeoffs between benefits and unintended consequences.
Trump’s embrace of the CBDC issue places him in a growing cohort of Republicans who view it as a hot-button election topic. Former presidential nomination candidates Vivek Ramaswamy and Ron DeSantis, both Republicans, took anti-CBDC stances during their campaigns. DeSantis, in particular, has already taken legislative action, signing a bill in Florida that bans the use of CBDCs in the state.
DeSantis’s concerns echo Trump’s, as he questioned the potential consequences of a programmable or purpose-bound CBDC. “What are they going to want to do here? If you go and buy too much gasoline, they won’t allow you to use this to make a transaction? Who knows? Maybe they won’t let you purchase a firearm,” DeSantis pondered, highlighting the anxieties surrounding the potential reach and control of CBDCs.
As Trump and other Republicans rally against CBDCs, they aim to capture the attention of their base and provide a new rallying cry for voters who may be searching for reasons to support the septuagenarian leader. The debate over CBDCs has thus become an unexpected focal point in the lead-up to the 2024 US presidential election, highlighting the complex interplay between technology, individual liberties, and political maneuvering.
Reference:
https://www.federalreserve.gov/newsevents/speech/bowman20230418a.htm
