A digital dollar will not make its way to Florida, Governor Ron DeSantis has stated, adding that he plans to introduce legislation prohibiting the use of the central bank digital currency (CBDC), which he says is the Biden administration’s attempt at financial surveillance.
In his announcement on Monday, DeSantis accused Biden of weaponizing the financial sector through a CBDC.
No CBDC in Florida https://t.co/p9pwSTmrlN
— Ron DeSantis (@GovRonDeSantis) March 20, 2023
The governor intends to introduce legislation restricting the use of a CBDC as money within the state’s Uniform Commercial Code. He will also prohibit the use of CBDCs issued by foreign central banks.
In a speech delivered behind a podium inscribed “Big Brother’s Digital Dollar,” DeSantis further called on other states to adopt similar legislations to fight against the digital dollar.
“The Biden administration’s efforts to inject a Centralized Bank Digital Currency is about surveillance and control. 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,” he stated.
DeSantis’ attack on a digital dollar is premature. While conducting research on the CBDC, the U.S. Federal Reserve has repeatedly stated that it doesn’t believe America currently needs a digital dollar. Recently, the Fed announced that it is set to launch FedNow, an instant payment service, in July. Many believe that the service is the bank’s response to the call for a CBDC.
But while the move is mostly a political gimmick by the shrewd politician, it could influence how the Republican party responds to the digital dollar and any efforts to create one. DeSantis, alongside Donald Trump, is the party’s frontrunner to be its presidential candidacy and holds great sway in the party’s ideologies.
Questioning the privacy of a CBDC is nothing new. Most Western analysts and politicians have been questioning China’s digital yuan for years now: former CFTC chair Christopher Giancarlo recently called on the Fed to uphold financial privacy with the digital dollar.
What makes DeSantis’ stand unique is that rather than calling for enhanced privacy, he says the digital dollar can’t provide privacy, a hardline stance that, if adopted by other Republicans, could spell doom for the CBDC.
Aside from an invasion of financial privacy, the governor claimed a digital dollar would stifle innovation in the state and diminish the role of smaller community banks through disintermediation. The latter is a common concern that some countries are solving by relegating account creation and maintenance to commercial banks.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: CBDCs and BSV
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