CBDC has been defined as “a form of digital money or monetary value, denominated in the national unit of account, that is a direct liability of the central bank”, as per the order.
President Donald Trump has issued an executive order prohibiting government agencies from taking any action to establish, issue or promote central bank digital currencies (CBDCs) within US jurisdiction or abroad.
The order would protect Americans from the ‘risks’ of CBDCs, which ‘threaten’ the stability of the financial system, individual privacy and US sovereignty, the White House said.
The order would protect Americans from the ‘risks’ of CBDCs, “which threaten the stability of the financial system, individual privacy and the sovereignty of the United States”, the White House said.
Such a move was long supported by Congressional Republicans.
Former president Joe Biden had instructed the Federal Reserve to mull over creating a CBDC.
Opponents of CBDCs that include several Republicans in US Congress criticize CBDCs, claiming these could threaten people’s privacy and potentially undermine the banking system by reducing people’s incentives to bank privately.
“People don’t need to worry about a central bank digital currency,” Fed chair Jerome Powell had told the US Senate Banking Committee last year. “Nothing like that is remotely close to happening anytime soon,” he had said.
During his election campaign trail, Trump had maintained that banning CBDC would be one of his agendas after assuming office.
The latest executive order, however, calls for a more robust, private-sector-driven digital asset ecosystem with special emphasis on dollar-backed stablecoins as an alternative to CBDCs.
Fibre2Fashion News Desk (DS)
