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DeSantis wants to ban federal digital currency, despite debunking of concerns

Orlando Sentinel logoOrlando Sentinel 3/20/2023 Jeffrey Schweers, Orlando Sentinel
Ron DeSantis speaks to Iowa voters during an event at the Iowa State Fairgrounds on March 10, 2023, in Des Moines, Iowa. © Scott Olson/Getty Images North America/TNS Ron DeSantis speaks to Iowa voters during an event at the Iowa State Fairgrounds on March 10, 2023, in Des Moines, Iowa.

TALLAHASSEE — Echoing recent claims by Alex Jones and other right-wing personalities that the federal government wants to create a Communist-style surveillance system to track the spending habits of Americans, Gov. Ron DeSantis on Monday said he wants to ban such activities in Florida.

At a news conference in Panama City, DeSantis said he’d heard such a plan was in the works within the Biden administration. He called on the Legislature to pass a law forbidding the use of Centralized Banking Digital Currency, or CBDC, in Florida, which he called a backdoor attempt at pushing “woke ideology.”

“It’s all about surveilling Americans and controlling American behavior. How do we know, look at China, where they cut off access to goods and services,” DeSantis said. “What are they going to want to do here? If you go and buy too much gasoline, they won’t allow you to use this to make a transaction? Who knows? Maybe they won’t let you purchase a firearm.”

Such a system currently doesn’t exist in the U.S. and isn’t likely to happen for years, if ever, according to federal officials.

A digital currency plan was highlighted in an executive order from President Joe Biden last year calling for “the highest urgency on research and development efforts” for a central digital bank. But Federal Reserve Chairman Jerome Powell said no such thing would happen without congressional approval, according to Fortune magazine.

Also, he said, they would only be used to allow bank-to-bank digital transfers.

“We are not at the stage of making any real decisions,” Powell told a congressional hearing two weeks ago. “What we are doing is experimenting in kind of early-stage experimentation.”

But DeSantis contended on Monday there is a concerted effort to get about 20 other states to allow their uniform commercial codes to allow centralized digital banking. He said he wants Florida to lead other like-minded states to push back and resist such efforts.

Republican South Dakota Gov. Kristi Noem, also a potential candidate for president in 2024, beat him to the punch 10 days ago when she vetoed a bill that would have banned the use of cryptocurrency, which she said would have opened the door to the federal government adopting a central bank digital currency, reported.

“At this moment in time, such a government-backed electronic currency has not been created,” Noem said in a news release. “It would be imprudent to create regulations governing something that does not yet exist. More importantly, South Dakota should not open the door to a potential future overreach by the federal government.”

She urged the 20 other states considering similar legislation to vote down those bills.

No such bill has been introduced in Florida, nor is there any indication the Legislature was considering such a bill this session, which began March 7.

The talk surrounding the centralized digital currency was fueled by statements made by discredited InfoWars host Jones and former President Donald Trump adviser Michael Flynn on social media.

“Global elites are trying to create a panic as an excuse to transition to CBDC total control,” a March 12, 2023, Instagram post of Jones and Flynn discussing the recent collapse of Silicon Valley Bank, or SVB.

Economists have attributed the bank’s failure to a drop in technology stocks and a rise in interest rates that sparked a run on the bank. But there is no connection to a CBDC, one expert said.

“A CBDC doesn’t change the financial system, it’s just a new thing they offer,” Josh Lipsky, senior director of the Atlantic Council’s GeoEconomics Center, told the Association for Financial Professionals.

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