Tuesday 21 March 2023

DeSantis Unveils Plan To Battle Biden’s ‘Efforts To Inject A Centralized Bank Digital Currency’

 Governor Ron DeSantis (R-FL) revealed a proposal on Monday meant to combat the possible implementation of a central bank digital currency by the Federal Reserve and the Biden administration.

Critics of a potential central bank digital currency note that the asset, which would be managed by the Federal Reserve and tethered to the value of the dollar, would create opportunities for government surveillance and control of private citizens. DeSantis proposed legislation that would ban the recognition of central bank digital currencies, whether from the federal government or an overseas central bank, as money under Florida’s Uniform Commercial Code.

“The Biden administration’s efforts to inject a Centralized Bank Digital Currency is about surveillance and control,” DeSantis said in a press release. “Today’s announcement will protect Florida consumers and businesses from the reckless adoption of a ‘centralized digital dollar’ which will stifle innovation and promote government-sanctioned surveillance. Florida will not side with economic central planners; we will not adopt policies that threaten personal economic freedom and security.”

Nations such as China, Australia, Japan, India, Russia, and South Korea are presently exploring central bank digital currencies, which have already been established in the Bahamas, Nigeria, and Jamaica, according to a report from the Atlantic Council.

Skeptics of central bank digital currencies have noted the many instances in which the financial system has been leveraged by public and private actors to oppose certain political perspectives, including those often held by conservatives. Canadian Prime Minister Justin Trudeau invoked emergency powers last year to freeze the personal and corporate bank accounts of people involved with demonstrations against vaccine mandates, while PayPal announced that the firm would withdraw funds from accounts deemed to be promoting racism or misinformation, a policy that the company later claimed was published by mistake.

Gov. Kristi Noem (R-SD) recently vetoed legislation that would have classified a potential central bank digital currency as money in South Dakota’s Uniform Commercial Code. DeSantis called on other states to adopt similar prohibitions on the digital assets.

“A Central Bank Digital Currency is the cornerstone of a federal government that could track each and every transaction that happens in the world,” Florida Chief Financial Officer Jimmy Patronis said in the press release. “There would be no privacy, and if there is no privacy, there are no rights. In the same way Florida is fighting back against the IRS, we need to fight back against this program. It’s how we protect freedom, liberty, and prosperity.”

One paper from the Federal Reserve argued that a central bank digital currency would preserve the international role of the dollar, promote inclusion in the financial system, and mitigate pitfalls from cryptocurrencies such as liquidity risk and credit risk. President Joe Biden has issued a “whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology,” while reports generated by the administration “encourage the Federal Reserve” to continue research into the technology and call upon the Treasury Department to establish an interagency working group to support the initiative.

Federal Reserve Chair Jerome Powell has said that his “mind is open” to a central bank digital currency and added that he was “legitimately undecided” on whether the “benefits outweigh the costs.” Monetary policymakers recently conducted a simulation with Citi, Mastercard, BNY Mellon, and other companies to determine the “feasibility of payments between financial institutions” using the technology.

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