Florida Governor Ron DeSantis is the next Republican politician to take a firm stance against Central Bank Digital Currencies (CBDCs) in the United States.
The governor recently voiced support for a ban on CBDCs within the state, blasting such technologies as tools of financial surveillance.
Standing Against CBDCs
“It provides the government with a direct view over all consumer activities,” said the governor, noting that CBDCs are “different” from cryptocurrencies like Bitcoin.
“What the central bank digital currency is all about is surveilling Americans, and controlling behavior of Americans,” he continued.
While crypto networks like Bitcoin are technically not private (all transactions are visible on its public blockchain), they are still anonymous. Anyone across the world is free to access the network without needing to identify themselves or their wallets.
By contrast, Federal Reserve chairman Jerome Powell has previously claimed that a potential CBDC would be the inverse of that: all network users would be identified and vetted, but their transaction history would remain private.
Nevertheless, DeSantis likened a potential CBDC to China’s digital yuan, where the People’s Bank of China surveils spending habits and can “cut off access to goods and services.” He also cited Nigeria as a cautionary tale, where the central bank has capped ATM withdrawals to boost the adoption of its eNaira – which triggered riots last month.
The governor fears that if such a currency took hold in the United States, the government could use it to censor transactions that they disapprove of, such as firearms and gasoline sales. “You’re opening up a major can of worms and handing a central bank huge amounts of power,” he continued.
DeSantis is hardly the first to speak against CBDCs: Republican congressman Tom Emmer introduced a bill last month to ban the Federal Reserve from issuing a CBDC to consumers, citing similar criticisms surrounding surveillance.
Senator Ted Cruz introduced a similar bill in March of last year, to ensure the government doesn’t “centralize and control cryptocurrency.”
Bankers Breaking the Rules
Besides CBDCs, DeSantis also criticized the Federal Reserve’s choice to bail out Silicon Valley Bank (SVB)’s depositors. The move applied to deposits beyond the Federal Deposit Insurance Corporation (FDIC)’s standard $250,000 limit, which was criticized by many European regulators.
The governor believes the move was a demonstration of the Fed’s willingness to break the rules when implementing a CBDC. “They will use that in ways that benefit their agenda,” he argued.
He also touched on the Fed’s new Bank Term Funding Program, which has been used to inject $300 billion back into the economy within a week of SVB’s collapse. DeSantis noted that the move had “wiped out” half of the progress made by the Fed in reducing the money supply throughout the past year in order to tame inflation.
“Are you interested in giving these economic central planners more power over our economy? … No we cannot have that happening,” he said.
Featured Image Courtesy of CNN.