President Trump may issue an executive order banning CBDCs as other governments around the world are rushing to launch their digital currencies.
On Monday, January 20, Donald Trump officially assumed the presidency of the United States, and speculation is rife about his potential first moves in office regarding cryptocurrency regulation. According to popular Fox journalist Elanor Terrett, in addition to signing an executive order (EO) establishing a crypto council, Trump is also expected to greenlight an additional EO that may ban the creation of a central bank digital currency (CBDC). The timeline for these executive actions remains uncertain.
Trump has been an outspoken critic of CBDCs, labeling them as “very dangerous” and asserting in July 2024, “There will never be a CBDC while I’m president of the United States.” He also vowed to defend the right to self-custody of digital assets, a sentiment resonating strongly with many in the crypto community.
CBDC Development in the US
The Federal Reserve has yet to decide on pursuing or implementing a CBDC, though it has been exploring its potential through research and experimentation. As of August 2024, the Fed’s primary focus remains on evaluating whether a digital dollar could enhance the “already safe and efficient” US domestic payment system.
However, the US appears to be trailing behind its global counterparts in the CBDC race. To date, three nations, The Bahamas, Nigeria, and Jamaica, have successfully launched their CBDCs. The Bahamas led the way with its Sand Dollar in October 2020. Additionally, 64 countries are in advanced stages of CBDC exploration, including 19 G20 nations, while 39 others remain in the research phase.
Domestically, efforts to curb CBDC development gained traction in May 2024 with the passage of the CBDC Anti-Surveillance State Act, spearheaded by Majority Whip Tom Emmer. The legislation, passed narrowly by a 216-192 vote, prevents the Federal Reserve from issuing a CBDC without Congressional oversight. Emmer and other critics argue that CBDCs could lead to excessive government control over citizens’ spending habits.
Changing Leadership
Meanwhile, President Trump appointed Mark Uyeda as acting SEC chair on Monday, succeeding Gary Gensler, who has faced massive criticism from the crypto community due to his negative stance on the crypto industry. This leadership change signals a potential shift in regulatory policies, particularly those that drew criticism during Gensler’s tenure.
While Trump’s stance on CBDCs and his apparent support for crypto-friendly policies have garnered attention, the trajectory of cryptocurrencies in the US will also depend on broader economic policies and global trends.
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