Florida Governor Ron DeSantis recently signed a new bill, SB-7054, which effectively bans the use of central bank digital currencies (CBDCs) in the state. The bill prohibits the use of CBDCs as a form of currency within Florida, as well as any CBDCs issued by other governments. It also calls on other states to follow suit and institute similar prohibitions.
Concerns Over CBDCs
DeSantis expressed concerns about the potential use of CBDCs to control and surveil Americans, citing examples such as the government using CBDCs to limit the purchase of gas to combat global warming or track firearm purchases. He believes that the use of CBDCs would infringe on Americans’ financial independence and their ability to conduct business without the government tracking every transaction in real-time.
Florida’s Move to Ban CBDCs
The bill, which amends Florida’s law to exclude CBDCs from the definition of money, passed with only one vote against it during a Florida House of Representatives session. DeSantis also claimed that the Biden administration is studying CBDCs to eliminate other types of digital assets like cryptocurrencies.
Global Trend in CBDC Development
Florida’s move to ban CBDCs comes amidst increased talks and discussions on the development of CBDCs worldwide. Many central banks are considering launching their digital currencies to modernize their economic system and provide better financial services to their citizens. China’s People’s Bank has been leading the pack, having started developing its e-CNY in 2014, and launching numerous test pilots of its CBDCs across various provinces. Other countries including South Korea, Japan, India, and Russia are also in the development or pilot stage.
However, some analysts have raised concerns over the potential impact of CBDCs on privacy and financial independence. Critics argue that CBDCs could provide a perfect tool for governments to control and track financial transactions, limiting people’s freedom to use their money as they wish. Furthermore, since CBDCs would be digital and traceable, governments could monitor citizens’ transactions and even use them to determine a person’s financial history, which could potentially lead to negative consequences for certain individuals.