The central bank digital currency (CBDC) is a concept driven by the central banks, after the success of stablecoins in the crypto market. CBDC is a centralised form of sovereign fiat money. Since the last few years, the majority of the Central banks in the world are working on their national CBDC, or say centralised digital currency. Because of the increasing competition among the central banks over the CBDC development race, the US Federal Reserve also planned to develop the American CBDC.
Recently Florida Governor Ron DeSantis proposed new legislation through a new bill over the American CBDC. The Bill seeks to ban the CBDC use in Florida.
According to the Florida Governor, American CBDC will increase the ability of the US central bank to track the financial activities and enhanced surveillance on the financial activities of the citizens will be a threat to the freedom of financial privacy act.
In short, the Florida Governor confirmed that Florida will not support the erosion of financial freedom.
Bill also secured support from Tarren Bragdon of the Foundation for Government Accountability. He noted that CBDC was against an “out-of-control” government bureaucracy.
FedNow, CBDC & Criticism
In 2022, The US Fed successfully developed a new payment system, called FedNow. The FedNow payment system will come into use for the companies & merchants by July of this year and that will provide instant settlement between two parties.
In May 2022, Fed Vice Chair Lael Brainard said that FedNow will work more similarly to the CBDC payment system and also said that the US doesn’t need the US digital dollar, or say CBDC.
From late 2021 to this date, many US officials raised issues over the nature of CBDC and the majority of the issues pointed out the negative impact of CBDC & privacy of the citizens.