Ron DeSantis

Presidential hopefuls RFK Jr. and Ron DeSantis rail against FedNow

The two presidential hopefuls are of the opinion that FedNow is the first step in launching a CBDC that threatens privacy and autonomy.

Presidential hopefuls Robert F. Kennedy Jr. and Ron DeSantis are railing against the Federal Reserve’s FedNow payments system, claiming it would pave the way for a central bank digital currency.

In an April 11 Twitter thread, Democrat RFK Jr. — the nephew of former president John F. Kennedy Jr. — once again sounded the alarm bells over CBDCs, describing them as the “ultimate mechanisms for social surveillance and control” as he questioned the Fed’s claims that FedNow wouldn’t be used to facilitate a CBDC:

“The claim that FedNow is not the first step toward a CBDC would be more easily digestible were we not aware of the Biden administration’s steady barrage of hostile broadsides against cryptocurrencies.”

He added that cryptocurrencies like Bitcoin (BTC) “give the public an escape route from the splatter zone when this bubble invariably bursts” and claimed that Joe Biden’s administration was “colluding with the banksters to keep us all trapped in the bubble of profiteering and control.”

RFK Jr. filed his candidacy documents on April 5 and has been highly critical of CBCDs, stating last week that they “grease the slippery slope to financial slavery and political tyranny.”

FedNow is a 24/7 instant payments system that is slated to launch in July with the aim of speeding up transfers between financial institutions and businesses while also providing a government-backed alternative to similar networks provided by the private sector.

The Fed has played down talk of the system potentially being integrated with a CBDC. On April 8, it addressed a series of frequently asked questions by saying that “no decision” has been made to issue a CBDC and it “would not do so without clear support from Congress and the executive branch, ideally in the form of a specific authorizing law.”

In an April 11 tweet responding to the Fed’s statement, Florida’s Republican Governor DeSantis stated that it is “not merely ‘ideal’ that major changes in policy receive specific authorization from Congress; it is constitutionally required.”

“Unaccountable institutions cannot impose a CBDC on Americans,” DeSantis said. “They will tell us that [a] CBDC won’t be abused but we are wise enough to know better. This wolf comes as a wolf.”

DeSantis is reportedly eyeing a presidential run himself and has also been pushing back against CBDCs. On March 20, he called for a ban on CBDCs in Florida, citing concerns over their potential use for surveillance and control over citizens.

However, some remain unconvinced of these statements.

Related: CBDCs ‘threaten Americans’ core freedoms’ — Cato Institute

Speaking with NBC News on April 7, Aaron Klein, a former United States Treasury official and chief economist at the Senate Banking Committee, argued that the privacy-related concerns held by JFK Jr. and DeSantis are misplaced.

Klein noted that financial institutions are already required to report transaction data under current anti-money laundering and terrorism financing laws, and as such, a CBDC wouldn’t encroach on privacy any further.

“What [DeSantis] is getting wrong is this idea that there’s more reporting if there’s a central bank digital currency than if it’s a commercial bank digital currency,” he said.

Klein also spoke to AFP Fact Check on April 11 and emphasized that FedNow is purely focused on speeding up current Fed payment rails.

“There is no difference in privacy or surveillance whether you are using your Visa card or a CBDC,” Klein said, adding that FedNow and CBDCs have “nothing to do with the other.”

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Texas lawmakers propose a gold-backed state digital currency

The bills state that the trustee must hold a sufficient amount of gold in reserve for all units of digital currency that have been issued and are still in circulation.

Two Texas lawmakers have introduced identical bills for creating a state-based digital currency backed by gold, a move that comes despite objections from several United States lawmakers against introducing a central bank digital currency (CBDC).

Senator Bryan Hughes introduced Senate Bill 2334 on March 10, with Representative Mark Dorazio introducing House Bill 4903 on the same day, stating that a fractional equivalent amount of physical gold would back the proposed digital currency.

“Each unit of the digital currency issued represents a particular fraction of a troy ounce of gold held in trust,” the bills stated.

Text of one of the bills. Source: capitol.texas.gov

The bill explains that once a person purchases a certain amount of digital currency, the comptroller would use that money received to buy an equivalent amount of gold.

The purchaser would then receive digital currency equal to the amount of gold that the comptroller purchases with the money received from the purchaser.

The value of a unit of digital currency must be equal to the value of the appropriate fraction of a troy ounce of gold at the time of the transaction.

Related: CBDCs will lead to absolute government control

“The trustee shall maintain enough gold to provide for the redemption in gold of all units of the digital currency that have been issued and are not yet redeemed for money or gold,” the bill stated.

It was added that a fee might be established “at any rate necessary” to cover the costs of administering this chapter.

Although neither of the bills has been passed or presented for a vote, both state that this act will take “effect September 1, 2023.”

Several United States lawmakers have recently argued against the U.S. introducing a CBDC.

Florida Governor Ron DeSantis stated in a March 20 press conference that CBDCs would grant “more power” to the government, adding that it provides the government “with a direct view of all consumer activities.”

Meanwhile, on March 21, Republican Senator Ted Cruz introduced a bill to block the Fed from launching a “direct-to-consumer” CBDC, stating that it’s “more important than ever” to ensure U.S. policy on digital currencies protects “financial privacy, maintains the dollar’s dominance and cultivates innovation.”

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

DeSantis is right — CBDCs will lead to absolute government control

From China to Canada, it’s clear that governments around the world are salivating at the prospect of introducing currencies they can manipulate hassle-free.

Arguing over the prudence and implications of issuing a central bank digital currency (CBDC) in the United States has seemingly become one of Washington’s favorite icebreakers. As Congress considers the question, it is critical that Americans clearly understand and soberly consider the immense power a CBDC could grant governments as well as the unacceptable risk of that power’s potential abuse. 

In March, Florida Governor Ron DeSantis introduced a proposal to ban CBDC use in his state, arguing that total monetary control by the federal government is dangerous for American society. Shortly after, the White House released its economic report in which it argued in favor of a CBDC as a mechanism for advancing “human rights, democratic values, and privacy.” The fact that many countries and monetary systems have begun to develop and issue their own CBDCs colors the domestic debate as well.

While no technology is inherently evil, the consequences of various technologies’ potential misuse varies considerably. So too a CBDC system is, at heart, merely a tool — not inherently good or bad on its own. But the downside risk of a CBDC’s misuse is so immense that the concept should be rejected. The idea of completely centralizing “absolute control” over people’s ability to engage in commerce via a CBDC should be anathema to free societies — even if the prospect of that power’s misuse seems outlandish today.

But in the United States, at least, it’s not outlandish. It would be naive to ignore America’s long journey of developing an increasingly pervasive financial surveillance system, as well as the possibility of a CBDC being used for the same purpose. America’s policymakers have a chance now to arrest that trajectory and build a better system that more consistently respects citizens’ right to privacy.

Related: White House report takes aim at Bybit — and forgot about Deribit

Proponents of a CBDC argue that it could advance financial inclusion and improve the efficiency of payments. They’re right, but the key issues here are what potential cost this might come with and whether or not there are alternatives available to accomplish the same objectives with fewer risks. Luckily, in this case, alternatives are numerous and extraordinarily varied: Ideas range from decentralized finance (DeFi) protocols to postal banks.

Critically, these alternatives can accomplish many of the core benefits that proponents of a CBDC point to while avoiding the downside risk of creating a system that, if abused, could undermine individual rights in a way few technologies ever could. A CBDC could not only grant a government total, unchecked surveillance into someone’s financial life — down to every cent spent — but also allow a government to, for example, prohibit an individual from engaging in commerce altogether or literally delete the assets of some disfavored individual or group of individuals. No government should have that power accessible via a few keyboard strokes.

Examples leveraging the (relative to a CBDC-based system) decentralized financial system we rely on today also warrant caution. In 2022, Chinese citizens who shared pictures of a banner condemning Chinese Communist Party General Secretary Xi Jinping lost access to their WeChat accounts. WeChat is a “do-everything app” that is commonly used as a method of payment, which means suspended users were unable to accomplish basic tasks such as calling taxis or purchasing groceries.

Related: The world could be facing a dark future thanks to CBDCs

Similarly, the Canadian government last year used emergency powers to order banks to freeze the accounts of people participating in protests the government deemed unlawful. Regardless of whether one believes that invoking such potent powers was justified in either particular case, these instances must give pause to anyone who is — or expects to ever potentially be — on the “wrong side” of a government. And, importantly, these actions were taken using a system that is unwieldy compared to the brutal efficiency of a CBDC.

Americans across the political and ideological spectrum should find common cause in rejecting the issuance of a CBDC, whether one is concerned about a CBDC’s power to grant the government “absolute control” over extremely personal life choices or because one is concerned about the federal government targeting disfavored individuals or groups writ large. A completely centralized monetary system almost begs to be abused. The mere possibility of such a powerful tool being used for unlawful, immoral or restrictive reasons on a societal scale means that the idea of issuing one warrants extreme suspicion, if not outright rejection.

Miller Whitehouse-Levine is the CEO of the DeFi Education Fund With oversight from the DEF’s grants committee, Miller has overall strategic and operational responsibility for the execution of the organization’s mission and goals. Prior to joining the fund, Miller led the Blockchain Association’s policy operation and worked at Goldstein Policy Solutions on a range of public policy issues, including crypto. Miller holds a B.S. in international politics and a minor in Mandarin Chinese from Georgetown’s School of Foreign Service.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

CBDCs will lead to absolute government control

From China to Canada, it’s clear that governments around the world are salivating at the prospect of introducing currencies they can manipulate hassle-free.

Arguing over the prudence and implications of issuing a central bank digital currency (CBDC) in the United States has seemingly become one of Washington’s favorite icebreakers. As Congress considers the question, it is critical that Americans clearly understand and soberly consider the immense power a CBDC could grant governments as well as the unacceptable risk of that power’s potential abuse. 

In March, Florida Governor Ron DeSantis introduced a proposal to ban CBDC use in his state, arguing that total monetary control by the federal government is dangerous for American society. Shortly after, the White House released its economic report in which it argued in favor of a CBDC as a mechanism for advancing “human rights, democratic values, and privacy.” The fact that many countries and monetary systems have begun to develop and issue their own CBDCs colors the domestic debate as well.

While no technology is inherently evil, the consequences of various technologies’ potential misuse varies considerably. So too a CBDC system is, at heart, merely a tool — not inherently good or bad on its own. But the downside risk of a CBDC’s misuse is so immense that the concept should be rejected. The idea of completely centralizing “absolute control” over people’s ability to engage in commerce via a CBDC should be anathema to free societies — even if the prospect of that power’s misuse seems outlandish today.

But in the United States, at least, it’s not outlandish. It would be naive to ignore America’s long journey of developing an increasingly pervasive financial surveillance system, as well as the possibility of a CBDC being used for the same purpose. America’s policymakers have a chance now to arrest that trajectory and build a better system that more consistently respects citizens’ right to privacy.

Related: White House report takes aim at Bybit — and forgot about Deribit

Proponents of a CBDC argue that it could advance financial inclusion and improve the efficiency of payments. They’re right, but the key issues here are what potential cost this might come with and whether or not there are alternatives available to accomplish the same objectives with fewer risks. Luckily, in this case, alternatives are numerous and extraordinarily varied: Ideas range from decentralized finance (DeFi) protocols to postal banks.

Critically, these alternatives can accomplish many of the core benefits that proponents of a CBDC point to while avoiding the downside risk of creating a system that, if abused, could undermine individual rights in a way few technologies ever could. A CBDC could not only grant a government total, unchecked surveillance into someone’s financial life — down to every cent spent — but also allow a government to, for example, prohibit an individual from engaging in commerce altogether or literally delete the assets of some disfavored individual or group of individuals. No government should have that power accessible via a few keyboard strokes.

Examples leveraging the (relative to a CBDC-based system) decentralized financial system we rely on today also warrant caution. In 2022, Chinese citizens who shared pictures of a banner condemning Chinese Communist Party General Secretary Xi Jinping lost access to their WeChat accounts. WeChat is a “do-everything app” that is commonly used as a method of payment, which means suspended users were unable to accomplish basic tasks such as calling taxis or purchasing groceries.

Related: The world could be facing a dark future thanks to CBDCs

Similarly, the Canadian government last year used emergency powers to order banks to freeze the accounts of people participating in protests the government deemed unlawful. Regardless of whether one believes that invoking such potent powers was justified in either particular case, these instances must give pause to anyone who is — or expects to ever potentially be — on the “wrong side” of a government. And, importantly, these actions were taken using a system that is unwieldy compared to the brutal efficiency of a CBDC.

Americans across the political and ideological spectrum should find common cause in rejecting the issuance of a CBDC, whether one is concerned about a CBDC’s power to grant the government “absolute control” over extremely personal life choices or because one is concerned about the federal government targeting disfavored individuals or groups writ large. A completely centralized monetary system almost begs to be abused. The mere possibility of such a powerful tool being used for unlawful, immoral or restrictive reasons on a societal scale means that the idea of issuing one warrants extreme suspicion, if not outright rejection.

Miller Whitehouse-Levine is the CEO of the DeFi Education Fund With oversight from the DEF’s grants committee, Miller has overall strategic and operational responsibility for the execution of the organization’s mission and goals. Prior to joining the fund, Miller led the Blockchain Association’s policy operation and worked at Goldstein Policy Solutions on a range of public policy issues, including crypto. Miller holds a B.S. in international politics and a minor in Mandarin Chinese from Georgetown’s School of Foreign Service.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.