Written by Hazel J. Greene, Senior Analyst

As the US Federal Reserve continues to explore the potential designs for a central bank digital currency (CBDC), prominent voices have emerged to condemn the idea. Republican representative Warren Davidson, a leading critic, recently took to Twitter to express his strong opposition, arguing that a CBDC undermines the core principles of money.

Representative Warren Davidson, hailing from Ohio’s 8th Congressional District, strongly believes that money should not be programmable by a central authority. In a tweet, Davidson likened the Federal Reserve’s efforts to develop a CBDC to constructing the “financial equivalent of the Death Star.” He asserts that CBDCs convert money into a tool for control and manipulation in the hands of the central authority. To counter this, Davidson urges Congress to swiftly ban and criminalize any attempts to create a CBDC.

Davidson’s critical remarks were prompted by a job advertisement from the Federal Reserve Bank of San Francisco, seeking a senior crypto architect for its CBDC project. The tweet reveals his strong opposition to the notion of a central bank-controlled digital currency.

While Davidson stands out as a prominent critic, other influential figures have expressed similar concerns about the potential launch of a digital US dollar. Florida Governor and US presidential candidate Ron DeSantis has vowed to ban any form of central bank digital currency if he is elected. In May 2023, DeSantis signed a bill outlawing the use of CBDCs in Florida. Another Republican, Tom Emmer, has also been vocal about his worries regarding a state-controlled digital dollar. Emmer has emphasized the potential for a programmable CBDC to be exploited for surveillance and the suppression of “politically unpopular activity.”

In response to the perceived risks associated with a CBDC, both Emmer and Senator Ted Cruz have introduced bills aimed at safeguarding Americans’ financial privacy. Emmer’s CBDC Anti-Surveillance State Act, introduced in February, seeks to protect citizens’ rights in the face of a potential state-controlled digital dollar. Cruz followed suit by introducing his own anti-CBDC bill in March, which similarly aims to preserve Americans’ financial privacy.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.