Yesterday, Republican Congressman Warren Davidson spoke out against the development of a future digital dollar, saying that “Central Bank Digital Currency (CBDC) corrupts money and turns it into a tool of coercion and control.” Like other Republicans, Mr. Davidson is firmly against programmability.

Anti-CBDC Tweets

Davidson was reacting on twitter to a CBDC job ad from the Federal Reserve Bank of San Francisco when he compared the development of a digital dollar to “the financial equivalent of the Death Star.”

One user responded that “necessary policies need to be put in place to ensure privacy and other consumer protection needs,” adding that the move towards smart programmable money should be welcomed.

However, Davidson disagreed. “Money should not be programmable by a central authority,” he said. “Money should be a stable store of value and an efficient medium of exchange, not a tool for surveillance, coercion and control.”

The Fed has emphasized that CBDCs would preserve privacy. Often the intent of programmability is to allow users to send money at specific times. However, other central banks, such as the ECB, have explicitly stated that programmability, such as restricting use for specific purposes, would not be allowed in the base layer.

Republican concerns about the digital dollar

Still, this is not the first time that American Republicans have spoken out against the idea of ​​a digital dollar. Earlier this year, Congressmen Emmer and Mooney introduced bills to curb efforts to issue CBDCs (particularly retail) citing financial privacy concerns. The latter was endorsed by the National Association of Federally Insured Credit Unions (NAFCU), a trade organization representing more than 180 members.

Florida Governor and GOP presidential candidate Ron DeSantis has also proposed anti-CBDC measures, as has Texas Senator Ted Cruz.

In general, fears of government control, the elimination of cash and cyber attacks continue to weigh on the opinions of many people. A recent poll by YouGov and the Cato Institute found that twice as many Americans oppose the idea of ​​a federally controlled digital dollar than support it.

The work of the Federal Reserve CBDC

Despite all this, the Fed is still eyeing a digital dollar. Its long-awaited position paper last year outlined several advantages, but it did not commit to formally issuing it. As Chairman Jerome Powell said in March, that decision is likely still years away.

Meanwhile, the state branches of the Federal Reserve have been moving forward. The Boston Fed completed the Hamilton Project in December, while the New York Fed’s New York Innovation Center has been active on wholesale use cases and cross-border applications with the Monetary Authority of Singapore (MAS). It also recently completed a digital currency trial with several banks related to the Regulated Liability Network (RLN).