Trump Promises to ‘Never Allow’ Central Bank Digital Currency

Entrepreneur Vivek Ramaswamy endorses Republican presidential candidate, former U.S. President Donald Trump during a campaign rally at the Atkinson Country Club in Atkinson, N.H., on Jan. 16, 2024. (Brandon Bell /Getty Images)

Former President Donald Trump promised on Jan. 17 to “never allow” the Federal Reserve to create a central bank digital currency (CBDC), also known as a digital dollar.

During a campaign stop in New Hampshire and joined on stage by former Republican candidate Vivek Ramaswamy, President Trump vowed never to give the U.S. government “absolute control over your money,” calling it a “dangerous threat to freedom.”

“As your president, I will never allow the creation of a central bank digital currency. Such a currency would give the federal government absolute control of your money,” he told a raucous crowd. “This would be a dangerous threat to freedom—and I will stop it from coming to America.”

Coming off his decisive victory in Iowa, President Trump pledged to install “strong protections” to prevent banks and financial regulators from trying to de-bank “you for your political beliefs.”

“That will never happen while I am your president,” the real estate billionaire mogul said.

There had been some speculation that Mr. Ramaswamy influenced President Trump on this issue. The entrepreneur told Fox News host Jesse Watters that the former president had been receptive to many of the topics he discussed, including opposition to a CBDC and pardons of key figures such as Julian Assange.

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“I’m not a politician. I’m a businessman,” Mr. Ramaswamy said on Jan. 17. “But I’m also somebody who cares about the details of policy and commitments. We had some great conversations backstage about that.”

Mr. Ramaswamy, who ended his campaign after finishing fourth in the Iowa caucus, has described CBDCs in the past as “a grave threat to liberty in this country.”

Republican Opposition to CBDCs

Many Republicans, including Florida Gov. Ron DeSantis, have been vocal in their opposition to digitizing the U.S. dollar.

At a CNN Republican debate in 2023, Mr. DeSantis discussed the topic and accused President Joe Biden of wanting to take away people’s privacy.

“They will absolutely regulate your purchases,” he stated. “On day one as president, we take the idea of a central bank digital currency and we throw it in the trash can. It will be dead on arrival.”

In May 2023, Mr. DeSantis signed legislation prohibiting CBDCs issued by the federal government from being used in the Sunshine State. Moreover, the bill installs protections against a central global currency by banning any CBDC by foreign reserves or sanctioned financial institutions.

“The Biden administration’s efforts to inject a Centralized Bank Digital Currency is about surveillance and control,” Mr. DeSantis said in a statement at the time, noting that other states should join him in this crusade.

“The government and large credit card companies should not have the power to shut off access to your hard-earned money because they disagree with your politics. Biden’s Central Bank Digital Currency aims to increase government control over people’s finances, and we will not allow it. In Florida, we value personal freedom and won’t allow self-interested elites to chip away at our liberty.”

Both chambers of Congress have received anti-CBDC legislation.

This past fall, House Majority Whip Tom Emmer (R-Minn.) reintroduced his Central Bank Digital Currency Anti-Surveillance Act, legislation that restricts the Fed and member banks from issuing a digital dollar and incorporating it into monetary policymaking decisions.

Mr. Emmer and 49 co-sponsors warned that “unelected bureaucrats” could threaten Americans’ freedoms with a CBDC by monitoring their transactions, eliminating privacy, and stifling political speech.

He likened the potential usage to Chinese Communist Party (CCP) authoritarianism.

“If not designed to be open, permissionless, and private—emulating cash—a government-issued CBDC is nothing more than a CCP-style surveillance tool that would be used to undermine the American way of life,” he said in a statement.

Sens. Ted Cruz (R-Texas) and Mike Lee (R-Utah) submitted a similar bill.

In September 2022, President Biden signed an executive order directing the federal government to assess the capacity and infrastructure needed to produce a CBDC.

CBDC Risks

There has been no shortage of opinions on digitizing the U.S. dollar.

Rep. French Hill (R-Ark.), the chair of the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion, argued during a Sept. 14, 2023, hearing that CBDCs don’t have much support “except from those on the fringes who think somehow a CBDC might be an amazing solution to many unstated global problems.”

The limited polling on the issue has observed a paucity of enthusiasm from the broader public. A May 2023 Cato Institute study revealed that only 16 percent of Americans support the federal government adopting a CBDC.

Experts warn that CBDCs could violate individual liberty.

“Introducing CBDC is likely to have certain costs to individual economic liberty by providing the state with more tools—and hence greater temptation—to establish command-and-control style public policy,“ said Christina Parajon Skinner, an assistant professor at the Wharton School of the University of Pennsylvania, noting that ”the costs of introducing CBDC appear to outweigh the benefits.”

Sheets of $1 bills run through the printing press at the Bureau of Engraving and Printing in Washington on March 24, 2015. (Mark Wilson/Getty Images)

One Fed official has espoused comparable risks in her speeches.

Last year, Fed Governor Michelle Bowman asserted that establishing a CBDC comes with a “risk” and could be an “impediment” to citizens’ “freedom” since this type of control could ignite the “politicization of the payments system and, at its heart, how money is used.”

“In thinking about the implications of CBDC and privacy, we must also consider the central role that money plays in our daily lives, and the risk that a CBDC would provide not only a window into, but potentially an impediment to, the freedom Americans enjoy in choosing how money and resources are used and invested,” Ms. Bowman told a crowd at a Georgetown University event.

Proponents say that CBDCs could be a tool to socially engineer society.

Speaking at the World Economic Forum in China last summer, Cornell University professor Eswar Prasad purported that the government could exploit digital money to nudge the public into buying certain goods and services and avoiding “less desirable” products, such as ammunition, drugs, or pornography. Central banks could also attach expiry dates to money, he noted.

“And that is very powerful in terms of the use of a CBDC, and I think also extremely dangerous to central banks,” Mr. Prasad stated at the so-called Summer Davos.

According to the Atlantic Council, 11 CBDCs have been launched, including in Nigeria, the Bahamas, Ecuador, and Senegal. Twenty-one are in the pilot phase, 33 are in the development stage, and 46 are still being researched.