As potential candidates fine-tune their platforms in anticipation of 2024 presidential campaigns, Robert F. Kennedy Jr jumped on board the CBDC hate train last week to join Florida Governor Ron DeSantis.
Kennedy, who’s filed papers to run as a Democrat in the upcoming presidential election, rang warning bells on Twitter, appearing to lump the launch of FedNow with that of a central bank digital currency, also known as a CBDC, which he said would “grease the slippery slope to financial slavery and political tyranny.”
His comments parallel those of several Republican lawmakers that have skewered CBDCs as an affront to financial privacy rights or potentially prone to restricting everyday purchases, bringing a bipartisan tinge to an issue that’s been largely publicized by conservative voices.
“A CBDC tied to [a] digital ID and social credit score will allow the government to freeze your assets or limit your spending,” Kennedy, who last year publicly apologized for comments made about Anne Frank within the context of an anti-vaccine mandate speech, wrote on Twitter. “While cash transactions are anonymous, a CBDC will allow the government to surveil all our private financial affairs.”
The Fed just announced it will introduce its “FedNow” Central Bank Digital Currency (CBDC) in July. CBDCs grease the slippery slope to financial slavery and political tyranny.
While cash transactions are anonymous, a #CBDC will allow the government to surveil all our private…
— Robert F. Kennedy Jr (@RobertKennedyJr) April 5, 2023
The Federal Reserve issued clarity on its upcoming launch of FedNow days later, setting the record straight in an updated section of its FAQs page. The Fed claimed it is not launching a CBDC when its FedNow payments service is expected to come online in July. It said the system for instant settlement between financial institutions isn’t a replacement for cash either.
“FedNow is a payments service the Federal Reserve is making available for banks and credit unions to transfer funds,” the post states. “The FedNow Service is neither a form of currency nor a step toward eliminating any form of payment, including cash.”
A central bank digital currency is similar to a stablecoin—they are both digital assets that are pegged to a sovereign currency like the U.S. dollar. However, instead of being issued by private companies on decentralized networks like stablecoins are, CBDCs are issued and managed by their respective governments or central banks.
The Fed has repeatedly said that the U.S. central bank will not release a retail CBDC without written approval from Congress. And the Fed reprised that message in its blog post on Friday, adding the executive branch would also have to be on board.
Though the Federal Reserve Bank of San Francisco posted a job opening seeking CBDC designers and developers in February, the Fed also reaffirmed it “has made no decision on issuing a central bank digital currency.”
Kennedy’s concerns align with those of Florida Governor Ron DeSantis, who railed against the notion of a CBDC in the Sunshine State last month. He speculated the technology could be used to curtail firearm purchases or limit gasoline sales as he introduced a ban on CBDCs—from any country—to the state’s legislature.
The technology has been condemned as antithetical to crypto’s founding principles by comparatively liberal voices as well, such as NSA consultant turned whistleblower Edward Snowden, who dubbed CBDCs “a cryptofascist currency” back in 2021.
Other Republican lawmakers raised notable concerns about CBDCs prior to DeSantis, including Republican House Majority Whip Tom Emmer and South Dakota Governor Kristi Noem, who took issue with amendments to the state’s Uniform Commercial Code (UCC).
UCC is a set of state-level business laws that provide default rules for structuring certain transactions, such as the sale of goods or lending arrangements. Noem claimed an amendment would exclude cryptocurrencies like Bitcoin from being defined as money while granting CBDCs the same status as the greenback.
I have returned HB 1193 with my VETO.
The bill adopts a definition of “money” to specifically exclude cryptocurrencies. But these revisions do include Central Bank Digital Currencies as money.
These developments concern me for several reasons, which are found in this letter: pic.twitter.com/3eqzdI80if
— Governor Kristi Noem (@govkristinoem) March 10, 2023
Along similar lines, Kennedy’s Twitter post claimed that FedNow was the first step to “banning and seizing Bitcoin,” while DeSantis’ anti-CBDC legislation prohibited the technology from being considered money with Florida’s Uniform Commercial Code.
But, as a set of laws that govern commercial transactions that may happen across state lines, changes to the UCC don’t have as clear of a tie-in to CBDC as politicians may appear to think, Carla Reyes, an Assistant Professor at the Southern Methodist University Dedman School of Law told Decrypt.
“In my view, a lot of the connection between CBDCs and the UCC in the political discourse is mistaken or reflects a misunderstanding of the role of the UCC as private law,” she said. “All the claims about, ‘the change to the definition bans Bitcoin and other cryptocurrencies,’ that’s not a thing.”
Reyes said that the UCC does not have the ability to ban anything as private law and that the amendments are there to make a distinction between cryptocurrencies and sovereign-backed money without making a value judgment of one over the other.
“It is not the role of the UCC to pick winners or losers in technology or in mediums of exchange,” she said. “It just provides rules so that people who enter into voluntary transactions using whatever they want […] know what rules to expect to apply to their transactions.”
Touching on DeSantis’s proposed legislation, banning CBDCs from Florida’s UCC wouldn’t actually prevent people from using the technology but rather make CBDCs subject to common law rules, which courts in Florida have applied to digital currencies in the past already, Reyes said.
“I’m not really sure what the goal of including a ban in the UCC would be because it would not do what they think it does,” she said. “As far as I understand what they’re trying to do, which is make it so no one could use it, that’s not what would happen.”
Leave a Reply