Tulsi Gabbard, a former presidential candidate and political commentator, opposes the development of a Central Bank Digital Currency (CBDC) in the United States by the Biden administration. According to Gabbard, CBDCs will be used as tools for mass financial surveillance and “undermine our autonomy and freedom.”
Standing Against a Cashless Society
In a tweet released over the weekend, Gabbard said that the federal government has already begun to implement its CBDC project, which will “bring about a cashless society where every transaction we make is tracked, monitored, and controlled.”
“To protect our freedom, we must all stand together in rejecting this effort to institute a digital cashless society,” wrote Gabbard.
A CBDC is a new form of digital money issued directly by a central bank to retail customers, rather than through commercial banks. Proponents argue that it could serve as a more secure and efficient means of payment and remittance, providing a “safe central bank liability in the digital financial ecosystem,” according to Federal Reserve Vice Chair Lael Brainard.
A BIS report in May 2022 suggested that 90% of central banks were already exploring the potential issuance of a CBDC, with over half of them already developing such a technology. That includes the United States after President Biden placed “the highest urgency” on potential US CBDC research as part of his crypto executive order in March of last year.
House and Senate Republicans, including Tom Emmer, Ted Cruz, and others, have been opposing CBDCs for their potential use in eliminating cash and compromising consumer privacy. Gabbard, a former Democrat, reiterated this view, stating in an interview that CBDCs are about “government-sanctioned surveillance and control.”
“It’s about them being able to keep track of every single thing that we purchase,” she said, “whether it’s a stick of gum, or an automobile, or anything in between.”
Federal Reserve Chairman Jerome Powell said in September that a CBDC, if implemented, would protect transaction privacy but still verify the identities of its users.
FedNow VS CBDCs
The former congresswoman added that the Federal Reserve’s new FedNow service, a 24/7 real-time payments service for depository institutions, is the first step toward a CBDC. However, the central bank published a statement on Friday clarifying that FedNow is not related to digital currency nor aimed at replacing cash, and is more comparable to existing services like Fedwire and FedACH.
European Central Bank President Christine Lagarde has previously acknowledged that innovation in the payments space – particularly in the form of CBDCs – would be necessary to ensure that central banks don’t become irrelevant. By contrast, she has dismissed standard decentralized cryptocurrencies like Bitcoin as “highly speculative assets,” that lack any future.
Gabbard has reportedly invested in crypto in the past, purchasing both Ether and Litecoin at the peak of the December 2017 bull market.