Trump promises to prevent the creation of a digital dollar if re-elected president

What’s new? In his campaign speech, Donald Trump said that he would not allow the Federal Reserve (Fed) to create a digital dollar if he became President of the United States again. He said the digital dollar would give the federal government absolute control over citizens’ money. “This would be a dangerous threat to freedom – and I will stop it from coming to America,” the businessman said at a speech in Portsmouth, New Hampshire.

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Digital dollar development. Back in early 2022, the Fed said in a report that the digital dollar is capable of radically changing the US financial system while acknowledging that Congress should decide whether to issue it. In April, Senator Elizabeth Warren, author of the “anti-crypto army” initiative and the cryptocurrency anti-money laundering bill, urged the Fed to accelerate the development of the asset. That same month, the Fed began studying the benefits of the digital dollar for payment systems, and the Depository Trust and Clearing Corporation (DTCC)began developing a prototype asset.

Fed Chairman Jerome Powell later noted that if launched, the nation’s cryptocurrency would not offer the ability to conduct anonymous transactions.

In March 2023, the White House, the Fed, and the Treasury Department created a task force on the digital dollar to see if the asset would help preserve US global financial leadership and national security, as well as protect the privacy of citizens while preventing use in illicit financial transactions. At the time, Powell said the central bank had no plans to issue the asset so far.

In November, Bank of America analysts reported that the Fed was piloting digital dollar but would not issue it without the support of the executive branch and Congress.

Opponents of the initiative. In October 2022, Fed Board of Governors member Chris Waller said the digital dollar would not strengthen the US position on the world stage because it could not fully address the risks associated with fraud, money laundering, or terrorist financing.

In May of the same year, the issuer of the USDC Circle urged the Fed to abandon the launch of a national cryptocurrency because it would have a detrimental effect on the private sector of stablecoins.

In March, Republican Senator Ted Cruz introduced a bill to ban the issuance of the digital dollar. According to the politician, the central bank could use the asset as a tool of financial supervision. In April, Democratic Party member Robert Francis Kennedy Jr. said that the digital dollar would lead the country into “financial slavery and political tyranny.”

In May, a ban on the use and testing of the digital dollar was approved by the states of Florida and North Carolina, and Texas senators also introduced their own resolution to ban the asset. At the same time, the House of Representatives members French Hill and Jake Auchincloss introduced their own bill to ban the asset at the federal level. They also believe the asset would become a tool for surveillance of citizens.

In December, Senator Warren Davidson also called for a ban on the issuance of the digital dollar, calling it a “threat to western civilization” because of the possibility of total control.