June 22, 2024

CBDCs are a threat to liberty: GOP candidate Vivek Ramaswamy

Vivek Ramaswamy, an ally of former President Donald Trump and one-time Republican presidential candidate, labeled the prospective digital dollar — Central Bank Digital Currency (CBDC) — as a threat to individual liberty.

Ramaswamy and Trump’s Stand

Ramaswamy, who earlier this month suspended his 2024 Presidential campaign and endorsed Trump, shared his apprehensions about CBDC in an interview with Bloomberg.

“A central bank digital currency, I believe, is a threat to liberty in this country because it creates a mechanism for the government to be able to wipe out your bank account or wipe out your dollars if you say or do something that the government disapproves of,” Ramaswamy says.

See below.

Beyond his stance on CBDCs, Ramaswamy favors a substantial reduction in the scope and size of federal agencies such as the U.S. Securities and Exchange Commission (SEC).

Ramaswamy’s advocacy extends to the crypto sphere, as seen in his December criticism of Gary Gensler, SEC Chairman, for what he perceives as ineffective crypto regulations.

In contrast to the narrative linking Bitcoin and digital assets to criminal activities, Ramaswamy asserts that Bitcoin provides an alternative to America’s “broken financial architecture.” He argues that embracing crypto aligns with policies that bolster economic freedom in the U.S.

Ramaswamy also made unsubstantiated corruption claims against the Food and Drug Administration (FDA). The comments caused Roivant, a biotech company he founded, to distance itself from the presidential hopeful.

When questioned about potential incentives for illegal activities through legitimizing the crypto industry, Ramaswamy points to flaws in existing policies and the historical misuse of traditional financial systems by criminals.

He specifically called out SEC Chair Gary Gensler, criticizing the regulatory body’s handling of cases like crypto exchange FTX and highlighting Gensler’s refusal to clarify Ethereum’s regulatory status.

Trump’s view

At a recent rally in Laconia, New Hampshire, Trump reiterated his opposition to CBDCs, aligning with Ramaswamy’s stance.

The GOP front-runner stated he that he will never allow the creation of a Central Bank Digital Currency.

Trump has already profited from non-fungible tokens (NFTs), but stated that he was “not a fan of Bitcoin,” calling it “highly volatile and based on thin air.”

On the Democratic front, Robert F. Kennedy Jr. has also raised reservations about CBDCs, warning of their potential as tools for social surveillance and control due to the lack of anonymity associated with digital currencies.

In contrast, President Joe Biden has taken a cautious but somewhat forward-looking approach towards CBDCs. His April 2022 Executive Order #14067 authorizes the Fed to assess the risks and opportunities of digital assets, including a U.S. CBDC.

Spain’s CBDC pilot

While the U.S. deliberates, Spain’s central bank, Banco de España, moves forward with its exploration of CBDCs. Collaborating with Cecabank, Abanca, and Adhara Blockchain in a six-month pilot, Spain aims to simulate interbank payment processing and settlement using tokenized wholesale CBDCs.

Adhara Blockchain, an international collaborator headquartered in the UK, adds a global dimension to this Spanish initiative. The focus remains on testing the feasibility of a single tokenized wholesale CBDC and facilitating the exchange of such CBDCs among various central banks. The experiment also involves settling a simulated tokenized bond using the wholesale CBDC.

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