Two US States Ban CBDCs. More To Come?
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Posted 02/06/2023
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Legislatures in Florida and Indiana have formally banned the operation of CBDCs… Central Bank Digital Currencies. With FedNow, the US Federal Reserve’s CBDC slated to launch in July, the fight to determine “what is money” is only getting hotter.
The new law in Florida specifically bans the use of a federally-adopted CBDC as legal tender within Florida’s Uniform Commercial Code (UCC). The law establishes protections against a global central currency by prohibiting any CBDC issued by a foreign nation, or a sanctioned central bank. The law also calls on like minded states to join in adopting similar legislation.
Florida has been joined by not only Indiana which has now passed similar legislation, but also Louisiana, Alabama, Texas and North Dakota, who have all drafted bills against CBDCs. As covered previously, a growing coalition of states have reintroduced Gold and Silver as legal tender: see that article here. When the concept of money becomes muddied beyond recognition, Gold and Silver always rise back to the top as the way out.
In Texas, lawmakers introduced a draft this month “Expressing opposition to the creation of a central bank digital currency”. The Texas Senate Concurrent Resolution 25 bill claims that a digitised US dollar “could lead to unprecedented levels of government surveillance and control over private cash holdings and transactions.”
The groundswell continues in North Dakota, with their bill addressing “The adoption of a Central Bank Digital Currency in the United States” saying that “the adoption of a CBDC by the federal government would hand unprecedented control over the lives, freedoms, choices, and sovereignty of the people of North Dakota to the Federal Reserve.”
There shouldn’t be that much debate as to whether any of this is legal however, as the US constitution makes it clear that:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts. (Article I, Section 10, Clause 1)
So far, only 11 countries have launched a CBDC, according to the Atlantic Council’s tracker. As we covered in Nigeria’s case, many of these government currencies are failing and being rejected by their citizens. While new functioning systems are light on the ground to date, many other nations are researching and trialing the technology, with China’s digital yuan leading the pack.
Pro-gold proponents have been proven right in forewarning the ramping levels of currency controls we are now seeing evidence of. There are also strong arguments in favour of Bitcoin, with the Spectator claiming: “Cash is King, Bitcoin is God”. Mitchell Hamilton’s article makes clear the potential downsides of introducing CBDCs, arguing:
If a Covid-like event came around again and world leaders wanted to enforce a lockdown, they could do it as simply as shutting off the bank accounts of non-essential businesses. You can’t go to the pub if the pub is no longer able to accept payments. And the ability of a pub to accept payments can be switched off with the click of a button. Every man and business can be switched off with the click of a button… (The Spectator 21/5/23)
We certainly hope it doesn’t get to that… but as they say, “hope for the best, prepare for the worst”.