Governor Ron DeSantis unveiled a proposal on Monday to battle the Federal Reserve and the Biden administration’s probable introduction of a central bank digital currency.
Opponents of a prospective central bank digital currency point out that the asset, which would be maintained by the Federal Reserve and tied to the value of the dollar, would allow the government to spy on and control private individuals.
Under Florida’s Uniform Commercial Code, DeSantis suggested legislation that would prohibit the recognition of central bank digital currencies, whether issued by the federal government or a foreign central bank, as money.
The Governor Ron DeSantis said in a Press Release:
“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. Florida will not side with economic central planners; we will not adopt policies that threaten personal economic freedom and security.”
According to an Atlantic Council research, countries such as China, Australia, Japan, India, Russia, and South Korea are now investigating central bank digital currencies, which have previously been developed in the Bahamas, Nigeria, and Jamaica.
Skeptics of central bank digital currencies have pointed to several instances in which public and private actors have used the financial system to oppose specific political positions, including those often held by conservatives.
Last year, Canadian Prime Minister Justin Trudeau declared an emergency to freeze the personal and corporate bank accounts of people involved in anti-vaccine demonstrations, while PayPal announced that it would withdraw funds from accounts deemed to be promoting racism or misinformation, a policy that the company later claimed was released to the public mistakenly.
Just a week before, Gov. Kristi Noem, a Republican from South Dakota, recently vetoed legislation that would have defined a prospective central bank digital currency as money under the Uniform Commercial Code of South Dakota. DeSantis urged other governments to enact similar restrictions on digital assets.
“At this moment in time, such a government-backed electronic currency has not yet been created,” (…) “More importantly, South Dakota should not open the door to a potential future overreach by the federal government.” The Governor’s veto text stated.
Noem also stated that cryptocurrencies, which are decentralized digital assets that can be exchanged between virtual wallets, would not be considered money under the legislation. She said that the measure therefore “needlessly” constrained liberties and put individuals at a “business disadvantage” by limiting development in this new industry.
According to one Federal Reserve report, a central bank digital currency would protect the dollar’s international position, encourage inclusiveness in the financial system, and avoid hazards associated with cryptocurrencies such as liquidity risk and credit risk.
According to Federal Reserve Chair Jerome Powell, his “mind is open” to a central bank digital currency, but he is “legitimately undecided” on whether the “benefits outweigh the costs.” Monetary authorities recently simulated the “feasibility of payments between financial institutions” using the technology alongside Citi, Mastercard, BNY Mellon, and other organizations.