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Governor Ron DeSantis of Florida has proposed legislation aimed at protecting residents of the state from the potential risks associated with central bank digital currencies (CBDC) and the increased government oversight that might come with it.
Governor DeSantis has expressed concern about the potential risks associated with central bank digital currencies, including the possibility of increased government scrutiny and loss of individual privacy.
In addition, he argues that the use of CBDCs can threaten the stability of the financial system and can cause inflation. He opinionated:
Today’s announcement will protect Florida consumers and businesses from reckless adoption of a “centralized digital dollar” that will stifle innovation and promote government-approved oversight.
Florida Follows Texas Steps To Prevent CDBC Publishing
Governor DeSantis’ proposed legislation is the latest example of the state taking action to counter a perceived threat from the federal government in response to a potential CBDC issuance. Other states, such as Wyoming and Texas, have already taken action on these assets in 2021.
Texas passed a law in May 2021 prohibiting government entities from requiring individuals to provide their identifying information in order to access or use digital currency. Additionally, the law prohibits states from seizing digital currency unless related to a criminal investigation.
Similarly, in March 2021, Wyoming passed a law recognize digital currency as property and establishment legal framework for its possession and use. In addition, these laws include provisions aimed at protecting user privacy, such as prohibiting the disclosure of personal information about digital currency transactions.
CBDC Prohibition To Protect Consumer Information
The actions taken by Texas and Wyoming are similar to what Governor DeSantis in Florida wants to achieve, as opposed to an executive order issued by President Joe Biden in 2022. This order mandates the government to evaluate the advantages and disadvantages of developing a bank digital currency center , like reported by Reuters.
According to DeSantis’ proposal, a federally approved CBDC, as suggested by the Biden administration, would reduce the role of community banks and credit unions in the US financial system. This is because CBDCs will be the direct responsibility of the federal government rather than chartered financial institutions, which could reduce the power of market lending. He claims:
Unlike decentralized digital currencies, CBDCs are directly controlled and issued by the government to consumers, giving government bureaucrats the ability to see all consumer activity and the power to cut off access to goods and services for consumers.
Governor DeSantis’ proposed legislation is potentially motivated by political considerations, as well as the protection of consumer information. Although he has yet to officially announce his candidacy for the Republican presidential election, DeSantis, alongside former President Donald Trump, is considered one of the top contenders for the GOP nomination. According to CNN reportthe contest may be a race between two conservative leaders.
Featured image from Unsplash, chart from TradingView.com
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