Ron DeSantis’ CBDC ban and what it would mean for crypto

Central Bank Digital Currencies (CBDCs), thanks in large part to ongoing crypto woes, are being met with skepticism by lawmakers and investors alike. One lawmaker in particular, Florida Governor Ron DeSantis, is pushing extra hard to see CBDCs banned in his state. The US government is still in its earliest stages of considering CBDC adoption. The news may influence whether or not it becomes a legislative priority. Moreover, investors are wondering whether the news will affect the market.

CBDCs are a hot topic among governments around the world. Essentially, they combine the ever-popular stablecoins with fiat currency. The government, usually through a Treasury or Federal Reserve Agency, issues these stack coins as legal tender. Through them, the authorities can create a system of regulated, wireless payments. Ultimately, CBDC could help a nation avoid physical money altogether.

These assets have entered the fold, especially over the past few years, thanks to the booming popularity of cryptocurrencies. In the crypto industry, companies like Circle already offers stablecoins built to retain a single price point. CBDC regulation will allow the US Treasury to control its own stablecoin and be able to nationalize these stablecoin stakes. This will prevent investors from being exposed to unintended consequences when faced with a private stablecoin operation, such as USD coins (USDC-USD) decoupling after the collapse of Silicon Valley Bank.

With countries like China already deep into CBDC testing, some Americans are excited about the prospect of a USD CBDC. However, there are many skeptics around whether CBDCs are all they are cracked up to be. One such skeptic, Ron DeSantis, is looking to make moves that could stifle the country’s ability to roll out its own digital currency.

Ron DeSantis looks to Bar CBDCs

Of the group of people skeptical of the CBDC market, Republicans are a majority. Republican lawmakers have expressed many issues with the challenges facing CBDC adoption and how to roll out digital currency. Florida Governor Ron DeSantis is one such lawmaker. This week, DeSantis is cracking down on a possible CBDC project by taking aim at blocking a digital USD in his state.

This week, Ron DeSantis says he wants to see any possible centralized banking currency banned in Florida. DeSantis justifies his potential ban by calling these assets “government-sanctioned surveillance.” He adds that they will stifle innovation by competing with the private sector. DeSantis also adds that he hopes to ban the use of foreign CBDCs in the state.

These views are in line with much of the Republican Party regarding the CBDC. Republicans on the Financial Services Committee in Congress express many of the same opinions. They argue that the government should work to promote competition between existing stablecoin companies rather than hinder them. Lawmakers also argue that a CBDC would become a “political tool.” It’s worth noting that DeSantis is behind several pro-crypto policies in Florida. DeSantis and other CBDC critics are vocal advocates of a privatized crypto industry.

With DeSantis’ plans, investors are left to wonder what impact this news will have. Should Florida bar CBDCs within its borders, other red states may be pressured to do the same.

At the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.