U.S. presidential aspirant and current governor of Florida Ron DeSantis has promised to ban central bank digital currencies (CBDCs) in the country if elected. However, Haven1 Director Akash Mahendra says this may cause “more harm than good.”
Mahendra said that mixing politics with cryptocurrency can be disastrous, adding that there were technological advantages and merits of CBDCs in helping the unbanked and reducing criminal activity.
“Central bank digital currencies (CBDCs) have once again been thrust into the spotlight, this time in light of Ron DeSantis vowing to ban CBDCs in the U.S. if elected president,” Mahendra said in an email to The Block.
“Yet mixing pure politics with crypto could do more harm than good. At its core, cryptocurrencies offer unique features that have only just been made possible, with immutability, privacy, transparency, decentralization and scarcity — fundamentally different from CBDCs,” he added.
DeSantis is a Republican politician known for his criticism of CBDCs and everything in-between.
His government has passed a bill than bans the use of CBDCs in Florida, and he intends to do same at the national level if elected president.
Mahendra however is of the opinion that digitization of money is inevitable, and CBDCs will eventually be integrated into existing payment systems.
“The digitization of money is the future, and it’s only a matter of time before CBDCs are integrated into existing payment systems,” he added.
“However, if the U.S. government decides to establish a CBDC, it should be solely based on its technological advantages and merits.”
How a CBDC Could Help
CBDCs have faced a lot of criticism because of the perceived control it gives the government over the people.
However, Mahendra says they have a potential to contribute to the growth of the U.S. economy.
He says that CBDCs could help over 7 million unbanked Americans, plus billions globally, while reducing criminal activity and cross-border fees.
“Cash and cryptocurrencies can co-exist alongside a government-issued currency.”
However, “individuals should have the freedom to choose their preferred payment methods, including the choice not to solely use a CBDC,” he added.
The Popularity of CBDCs
Indeed, CBDCs are popular among governments around the world because of the power for financial control that it affords.
The International Monetary Fund (IMF) has also recommended them as an alternative to an outright ban on crypto worldwide.
However, the citizens have reservations on government-issued CBDCs and for good reason.
A blockchain developer recently discovered something socking about the Brazilian CBDC.
He found out the government included codes that allow it to freeze funds and manipulate balances using its proposed CBDC.
This is the basis on which Republicans like DeSantis are aggressively fighting against the release of such a digital currency.
It may take some effort to convince the people otherwise with such a trend.
