- Former President Trump has vowed to block the creation of a US Central Bank Digital Currency (CBDC) if re-elected
- In a recent New Hampshire address, Trump expressed his commitment to protecting Americans from “government tyranny” associated with digital currency
- The Federal Reserve is in the early stages of exploring a digital dollar, with no concrete plans developed yet
Former President Donald Trump recently pledged to prevent the creation of a US Central Bank Digital Currency (CBDC) if re-elected. In a recent address in New Hampshire ahead of the state’s primary election, Trump asserted his commitment to shielding Americans from what he termed “government tyranny” and explicitly stated his opposition to the development of a digital currency by the Federal Reserve. No concrete plans have been drawn up by the Fed with regard to a digital dollar, although it is understood that the project is going through its early stages.
Trump Vows to Protect Americans from “Government Tyranny”
The subject of CBDCs has only come up in public debate in the last couple of years, with libertarians warning over the level of surveillance that such a payment system would bring; the government could ban citizens from spending their money at certain outlets or on certain items and would be able to seize their funds at a moment’s notice.
Trump briefly addressed the potential of a CBDC under his watch during the rally on Wednesday, saying he would not allow it to be launched during any potential presidential term:
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.
The Federal Reserve, under the leadership of Chair Jerome Powell, has not yet made a definitive decision on the implementation of a fully digital version of the U.S. dollar. Powell has emphasized that any such move would require explicit approval from both Congress and the executive branch. Despite ongoing research suggesting the technological feasibility of a digital dollar, its public availability has generated political controversy.
Trump Rivals Also Promise CBDC Action
Governor Ron DeSantis of Florida, a primary opponent of Trump, has actively opposed the establishment of a CBDC, preemptively banning its use in his state. DeSantis has expressed concerns that a digital dollar could be used for government surveillance of individuals’ spending habits, drawing parallels to China’s utilization of its own digital currency.
While the design details of a potential CBDC remain unsettled, the Federal Reserve has indicated a preference for a token-based system held in digital wallets by banks or regulated financial institutions. This approach aims to balance consumer privacy with the transparency necessary to combat criminal activities. Additionally, there is a possibility that a digital dollar may be limited to facilitating interbank payments, potentially reducing transaction costs across borders.
