Republicans are sounding the alarm over the U.S. Federal Reserve’s central bank digital currency (CBDC) plans, while ‘crypto’ voters prefer CBDC-opponent Donald Trump as president rather than a second term for Joe Biden.
On March 13, Rep. Tom Emmer (R-MN) tweeted a photo of a document he claims was presented to his staff at some unspecified date by Fed representatives. The document bears a “Key Duties of the Fed—Payment Systems’ header, and the last item on this list is ‘Central bank digital currency (CBDC).’
Emmer intimated that the document exposed the lie behind Fed Chairman Jerome Powell’s March 7 comments during a Senate banking committee hearing. Powell told the committee that the Fed was “nowhere near recommending or let alone adopting a central bank digital currency in any form.”
Powell said that the Fed would only launch a CBDC “through the banking system” to ensure a different scenario than China’s digital yuan, which allows the government to “see all your transactions.” Powell added that the “last thing’ the Fed wants is “to have individual accounts for all Americans, or any Americans for that matter. Only banks have accounts at the Fed, and that’s the way we’re going to keep it.”
Needless to say, the more reactionary elements of ‘crypto Twitter’ rose in arms at Emmer’s tweet, seeing evidence of a conspiracy to impose fascism, communism, and (probably) sap or impurify our precious bodily fluids.
The Fed released a report earlier this year examining the potential ramifications—pro and con—of introducing a CBDC pegged 1:1 with the U.S. dollar. The report noted that introducing any new fixed-rate asset could affect the Fed’s existing monetary policy tools, the impact of which remains a matter of some debate.
In 2021, Powell stated that the Fed wouldn’t issue a CBDC without the support of both Congress and the occupant of the White House. Regardless, an anti-CBDC bill was introduced in the Senate a few weeks ago by five Republicans. Sponsor Ted Cruz (R-TX) said legislation was required to prevent President Biden from “infringing on our freedom and intruding on the privacy of citizens to surveil their personal spending habits.”
Former President Trump is unequivocal in his opposition to CBDCs, stating in January that “as your president, I will never allow the creation” of a CBDC. Trump told a New Hampshire rally audience that a CBDC would give the federal government “absolute control over your money,” which he described as “a dangerous threat to freedom.”
In March 2022, Biden issued an executive order that placed “the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC.” Later that year, the White House encouraged the Fed to “continue its ongoing CBDC research, experimentation, and evaluation.” But the administration has been pretty much silent on the subject ever since.
Survey says
America’s November vote for either Biden or Trump will likely prove as much of a nailbiter as their original tilt four years ago. The election is expected to come down to a handful of swing states, each of which could be decided by extremely narrow margins. This could elevate fringe groups from afterthoughts to potential kingmakers.
A new online poll by the Paradigm venture capital group (founded by Coinbase (NASDAQ: COIN) co-founder Fred Ehrsam III) found that nearly half (49%) of respondents didn’t trust either party to oversee all things ‘crypto,’ with Democrats (weirdly) even less likely than Republicans to have faith that their government would get this right.
The poll, conducted with the self-described ‘Republican polling firm’ Public Opinion Strategies, found that a plurality (48%) of digital currency owners said they planned to vote for Trump, while 39% favored Biden and 13% were on the fence. Interestingly, the script seems to have flipped from 2020, as 43% claimed to have voted for Biden versus 39% who backed Trump in their original tilt.
Biden’s support may have fallen even lower among these single-issue voters had they heard of his recent 2025 budget proposal, which recycles his 2024 budget’s plan to impose a 30% excise tax on the electricity costs involved in digital asset mining operations.
The poll was conducted from February 28 to March 4, and the Trump-supporting cohort would probably have been larger had the poll been taken just one week later. On March 11, Trump phoned CNBC’s Squawk Box and was quizzed regarding his views on the BTC token hitting record-high fiat values.
In 2019, Trump claimed he was “not a fan” of digital currencies, the value of which he claimed was “based on thin air.” In 2021, Trump was still dismissive, saying, “It just seems like a scam.” As with his CBDC sentiments, Trump’s digital currency opposition was explained as “it’s another currency competing against the dollar.”
However, Trump told CNBC that BTC and other “crazy currencies” have “taken on a life” since then. Trump further noted that he let some of his fans pay for their MAGA swag—including his garish gold sneakers—with BTC. Trump said he was “very much a traditionalist” who hates “when countries go off the dollar,” but “I’m not sure that I’d want to take [crypto] away at this point.”
Trump is notorious for praising anything that brings him money, as well as being heavily influenced by whichever rich person spoke to him last. Take his recent flip-flop over banning TikTok following a single conversation with TikTok investor/billionaire donor Jeffrey Yass. So all it might take for Trump to reclaim his anti-digital currency stance could be one bad headline (or Biden raising more money than Trump via digital currencies).
Fairshake largely targeting Democrats
Fresh off their $10 million investment in blocking the bid by Rep. Katie Porter (D-CA) to assume the U.S. Senate seat left vacant by the death of Dianne Feinstein, the Fairshake political action committee (PAC)—comprising Coinbase, its stablecoin partner Circle, Ripple Labs, Andreessen Horowitz, and other ‘crypto’ notables—is turning its sights on four other Senate races this November.
A Fairshake spokesperson told Decrypt that the PAC would focus on races involving two incumbent senators who are known skeptics/critics: Sen. Sherrod Brown (D-OH) and Sen. Jon Tester (D-MT).
Brown is by far the more vocal critic, using his position as chair of the Committee on Banking, Housing and Urban Affairs to cast aspersions on all things ‘crypto’ and defend
Securities and Exchange Commission (SEC) Gary Gensler from the committee’s pro-digital currency members.
Meanwhile, Tester earned his ‘F’ rating from Coinbase’s Stand With Crypto group in part for his statement regarding ‘crypto’ in December 2022, which is worth quoting in full. “It’s all bullshit.” Tester later opined that he sees “no reason why this stuff should exist.”
Fairshake will also attempt to put its thumb on the scales of two Senate primaries, again, both involving Democrats. Fairshake declined to say which candidates it might support in these Maryland and Michigan primaries.
But on March 15, Politico reported that Maryland Senate candidates Rep. David Trone (D-MD) and Prince George’s Country Executive Angela Alsobrooks had begun championing pro-digital currency policies, evidently in the hopes of snaring some of this campaign spending.
The Democrats currently hold a razor-thin 51-49 Senate majority, but there are nearly twice as many Democrat seats (20) in play this year than Republicans (11) plus three independents, all of whom caucus with the Dems.
The Senate is in charge of approving White House agency appointments, including the five commissioners of the SEC, who serve five-year terms. Sadly for Coinbase and the other Fairshake members, digital currency foe SEC Chair Gensler’s term won’t expire for another two years.
This political influence campaign isn’t just being waged on a regional basis. On March 20, Coinbase will host an ‘Update the System Summit’ in Washington, DC, with a speakers list that includes Sen. Cynthia Lummis (R-WY) and five members of the House of Representatives, including Patrick McHenry (R-NC), Ritchie Torres (D-NY) and Warren Davidson (R-OH).
The summit’s mission statement is to discuss “the pivotal role policy has to play in determining how American innovation can flourish.” In reality, their mission is critical to keeping the ‘crypto casino’ model viable so that projects with no practical utility can continue to issue tokens that can be sold on exchanges like Coinbase to retail customers who hope to ride these financial rockets to the moon. If only we could vote these jerks out of their office.
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: SEC Commissioner Hester Peirce on Blockchain Policy Matters
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