The central bank digital currencies (CBDCs) has been a topic of intense discussion in the United States. Recently, Tulsi Gabbard, former presidential candidate and political commentator, joined the anti-CBDC club.
Reportedly, Gabbard is taking a stand against the Biden administration’s plans to develop a CBDC in the country. The ex-congresswoman argued that CBDCs will be used as tools of mass financial surveillance that “undermine our autonomy and freedom.”
In a tweet expressing her concerns, Gabbard said that the federal government has already begun to implement its CBDC project, which will “bring a cashless society where every transaction we make is tracked, monitored, and controlled.” She added:
It’s about them being able to keep track of every single thing that we purchase whether it’s a stick of gum, or an automobile, or anything in between.
The former congresswoman added that the Federal Reserve’s new FedNow service – a 24/7 real-time payments service for depository institutions – is the first step toward a CBDC. She also tries to unite the US citizens against the government’s plans and to protect freedom. As she wrote:
To protect our freedom, we must all stand together in rejecting this effort to institute a digital cashless society.
However, the central bank published a statement clarifying that FedNow is not related to digital currency nor aimed at replacing cash, and is more comparable to existing services like Fedwire and FedACH.
The CBDCs have been a topic of wide controversy in the US for people raising concerns over topics like privacy. On the other hand, the advocates of the CBDC say that it is an efficient and more secure way along with ensuring cost efficiency with lower maintenance costs.
Jerome Powell, Federal Reserve Chairman, said in September that a CBDC, if implemented, would protect transaction privacy, but still verify the identities of its users. Recently, Lael Brainard, Federal Reserve Vice Chair opined that CBDCs could serve as a more secure and efficient means of payment and remittance, providing a “safe central bank liability in the digital financial ecosystem,”
Before Gabbard, several leaders have already voiced their concerns on the subject. However, considering the composition of the US political arena and how states and lawmakers have been divided on the topic of digital assets. Most of the time Republican leaders have been found to advocate for cryptocurrencies and voice concerns around the CBDC whereas Democrats tend to do the opposite and criticize the crypto industry.
House and Senate Republicans alike –including Tom Emmer, Ted Cruz, and others – have consistently opposed CBDCs for their potential use to eliminate cash and strip consumers of their privacy.
Interestingly, this week has seen the tables turn as the members associated with the Democratic party have started coming forward to criticize the Federal Reserve and its plans around CBDC. Gabbard is a former member of the Democratic party and before her, Robert Kennedy, another Democrat lawmaker, questioned the intentions behind the CBDC.
However, the popularity of CBDCs has taken over across the globe, and over 114 countries are expected to be invested in the idea. It has also gained significant interest from international agencies and organizations like the Bank of International Settlements (BIS).
Recently, Christine Lagarde, president of the European Central Bank (ECB), acknowledged that innovation in the payments space particularly in the form of CBDCs would be necessary to ensure that central banks don’t become irrelevant.