American presidential candidates from both sides of the aisle are down on the digital dollar.
The U.S. has not unveiled concrete plans for a central bank digital currency (CBDC), and officials have expressed caution about doing so.
However, that hasn’t stopped Republicans and at least one Democrat who hope to occupy the White House from denouncing the concept, Bloomberg News reported Sunday (April 23).
Among them is 37-year-old billionaire entrepreneur Vivek Ramaswamy, who announced his candidacy for the Republican presidential nomination in February.
According to the Bloomberg report, he has said in interviews and on social media that a CBDC would pave the way for a social credit system in America, making the country more like China, which debuted its digital yuan two years ago.
Tricia McLaughlin, a spokeswoman for Ramaswamy, told Bloomberg the candidate believes opposing CBDCs should be a litmus test for presidential candidates, one that it shouldn’t be controversial for Republicans.
Ramaswamy was a bit blunter on Twitter last month: “Every GOP candidate needs a clear answer to CBDCs: hell no.”
Meanwhile, Florida Gov. Ron DeSantis — often mentioned as a potential rival to Donald Trump for the nomination, though he has yet to announce he’s running — has proposed a ban on CBDCs in his state and called on other states to do the same.
On the Democratic side, Robert F. Kennedy Jr. has criticized CBDCs and the forthcoming FedNow payment system, apparently conflating the two on Twitter. A representative for his campaign told Bloomberg FedNow is a step toward CBDCs and would subject people’s financial data to government intrusion.
It’s not just politicians expressing doubts about CBDCs. In a speech last week at Georgetown University, Federal Reserve Governor Michelle W. Bowman said it was unlikely that the benefits of a CBDC would outweigh potential risks.
“From my perspective, there could be some promise for wholesale CBDCs in the future for settlement of certain financial market transactions and processing international payments,” Bowman said.
“When it comes to some of the broader design and policy issues, particularly those around consumer privacy and impacts on the banking system, it is difficult to imagine a world where the trade-offs between benefits and unintended consequences could justify a direct access CBDC for uses beyond interbank and wholesale transactions,” she added.
In a separate speech last year, Bowman argued that FedNow “addresses the issues that some have raised about the need for a CBDC.”