US Rep. Warren Davidson criticizes central bank digital currencies (CBDCs) and advocates for permissionless peer-to-peer (P2P) money instead.

US Rep. Warren Davidson criticizes central bank digital currencies (CBDCs) and advocates for permissionless peer-to-peer (P2P) money instead.

The Blockchain Industry Faces Opposition from US Politicians

Source: Pexels / Karolina Grabowska

The blockchain industry is facing opposition from US politicians, who are expressing concerns about the development of a government central bank digital currency (CBDC). This opposition highlights the ongoing debate surrounding the role of digital currencies in the financial system and the potential implications for privacy and control.

The Pushback Against CBDCs

Republican Representative Warren Davidson has been particularly vocal in his opposition to CBDCs. In response to a job posting by the San Francisco Federal Reserve Bank for a “senior crypto architect” to work on a CBDC project, Davidson accused the Fed of “building the financial equivalent of the Death Star.” He called for the swift ban and criminalization of any activity related to designing, building, developing, or testing CBDCs.

Davidson’s main argument against CBDCs is that they corrupt money into a tool for coercion and control. He believes that money should not be programmable by a central authority and advocates for the use of permissionless peer-to-peer (P2P) transactions instead.

The Concerns Surrounding CBDCs

Davidson’s concerns are not isolated. Other politicians, such as Florida Governor Ron DeSantis and Republican Tom Emmer, have voiced similar worries about the potential impact of CBDCs on privacy, consumer choice, and market competitiveness.

DeSantis banned the use of a “centralized digital dollar,” stating that it is an attempt to surveil and control the finances of Americans. Emmer has gone a step further by introducing the CBDC Anti-Surveillance State Act, which aims to prohibit the Federal Reserve from issuing a CBDC in the US and improve oversight on all CBDC-related work done at the Fed. Emmer describes state-controlled digital money as a “weapon” to spy on US citizens.

The Fate of the Digital Dollar

The US Federal Reserve has been actively researching a government-backed CBDC, commonly referred to as the digital dollar. However, the Fed has made it clear that a CBDC would not be issued without authorization from Congress.

Despite the opposition from lawmakers like Davidson, DeSantis, and Emmer, the fate of a digital dollar still remains uncertain. The fact that a group of politicians is expressing concerns about CBDCs does indicate that there is a growing movement against them. With the rising debate over surveillance, control, and privacy, the digital dollar might face challenges in gaining widespread acceptance in the near future.

Overall, the opposition from US politicians reflects the broader debate surrounding the use of blockchain technology and digital currencies in the financial sector. It highlights the need for a careful consideration of the potential benefits and drawbacks of CBDCs to ensure a balanced and transparent financial system that preserves individual freedoms and privacy.