Amidst the growing unease about privacy violations via central bank digital currencies, one American state is taking action to ban their usage as recognized currency.
Florida Governor, Ron DeSantis, called to outlaw the Fed’s CBDC This move is influenced by the perception that a digital dollar could be leveraged to monitor and manipulate American citizens.
The opposition to CBDCs was prominently voiced during a conference on March 20, where DeSantis declared any CBDC as the 'Digital Dollar of Big Brother.'
No Money Surveillance
The state's governor insists that allowing a digital dollar issued by the Fed would grant undue influence to those at the helm of the central bank.
CBDCs open an unguarded portal into citizens’ financial transactions, a power that, according to DeSantis, could jeopardize financial autonomy.
DeSantis' worries aren't unfounded, especially when issues faced by CBDCs in nations like China, Nigeria, and the Bahamas come to light.
China has been pushing ahead with the digital yuan, its own version of a CBDC, under the supervision of the People's Bank of China.
Trials for the digital yuan are being conducted across multiple cities in China, with potential updates and regulatory adjustments anticipated soon.
CBDCs Are Tricky
Discussions around CBDCs often stir controversy due to the potential downsides. The Federal Reserve's recent projects with major banks have faced numerous implementation challenges.
CBDCs offer central powers more oversight over financial exchanges, potentially restricting certain transactions or purchase strategies.
There’s a possibility that a central bank could cap how much CBDC individuals or organizations can handle, aiming to fulfill specific policy goals like limiting cross-border transfers.
Representative Tom Emmer from Minnesota, known for supporting crypto, has put forward a proposal to block the Fed from introducing a CBDC.
Named the 'CBDC Anti-Surveillance State Act,' this legislation seeks to prevent any CBDC governed by the Fed to safeguard citizens' financial privacy.
This is Emmer’s sequel attempt after the original proposal met with disapproval.
Crypto Are A Solution
Beyond CBDCs, the looming changes in the financial ecosystem have recently sparked substantial societal debate. Recent banking issues have reinforced the notion that a new global payment approach might be on the horizon.
Indeed, the Fed previously announced the launch of a new platform to speed up payment processes, allowing financial exchanges in real-time by 2023.
Unveiled in 2019 as 'FedNow,' this system aims to enhance financial inclusion and spur innovation within the payment sector, facilitating immediate transactions.
No direct association between FedNow and CBDCs or blockchain tech was indicated. Although CBDCs could enable rapid transactions, FedNow operates independently of them.
Earlier, CBDCs were seen as potential adversaries to cryptocurrencies. Nevertheless, Nigeria’s launch of the eNaira appears to suggest different implications.
Though the eNaira’s introduction was highly publicized, its adoption rate among Nigerians and businesses seems underwhelming.
Only a meager 0.5% of the Nigerian populace engaged with the eNaira during its trial, prompting doubts about the vitality of CBDCs.
Meanwhile, cryptocurrencies entice those seeking privacy, decentralization, and the ability to operate without censorship, advantages not typically afforded by CBDCs.
