Former US President Donald Trump recently made a bold statement that could have a significant impact on the future of digital currencies in the US. At a rally in New Hampshire, he promised to block the creation of a digital currency by the central bank (CBDC) if he is re-elected president.
A firm stance against digital currency
Donald Trump has made clear his opposition to the creation of an all-digital version of the US dollar by the Federal Reserve (Fed). This comes as the Fed continues to study the technical feasibility of such an initiative. However, the prospect of a publicly available digital dollar appears to be becoming politically toxic, with figures such as Florida Governor Ron DeSantis also voicing their opposition.
The challenges of the CBDC
A CBDC is in fact a cryptocurrency controlled by a country’s central bank, linked to a national fiat currency. Unlike standard cryptocurrencies, a CBDC would be under complete state control, raising questions about privacy and economic freedom. Trump has called such an initiative a “dangerous threat to liberty”, highlighting concerns about government surveillance and control over citizens’ spending.
The FED’s Position
Although the Federal Reserve has not yet decided to create a digital version of the dollar, it has conducted research indicating that it would be technically possible. Fed Chairman Jerome Powell has made it clear that the bank would not take this step without the explicit approval of Congress and the executive branch.
Trump’s statement reveals a growing political divide in the US over the future of digital currencies and the CBDC. While some see the CBDC as an inevitable technological development, others, like Trump and DeSantis, see it as a potential tool for government surveillance and control, going against the principles of individual freedom.
