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Former presidential candidate and political analyst Tulsi Gabbard is opposing the Biden administration’s initiatives to create a Central Bank Digital Currency (CBDC) in the United States.
The former congresswoman contended on Sunday that CBDCs will serve as instruments of widespread financial surveillance that “undermine our autonomy and freedom.”
Opposition to a Cashless Society
In a tweet shared over the weekend, Gabbard stated that the federal government has already initiated its CBDC project, which will “lead to a cashless society where every transaction we conduct is tracked, monitored, and controlled.”
“To safeguard our freedom, we must unite in rejecting this attempt to establish a digital cashless society,” Gabbard wrote.
A CBDC represents a new type of digital currency issued directly by a central bank to retail customers, rather than through commercial banks. Advocates claim that it could provide a more secure and efficient method of payment and remittance, offering a “safe central bank liability in the digital financial ecosystem,” as noted by Federal Reserve Vice Chair Lael Brainard.
A report from the Bank for International Settlements in May 2022 indicated that 90% of central banks were already investigating the potential issuance of a CBDC, with more than half actively developing such technology. This includes the United States, following President Biden’s designation of “the highest urgency” on potential US CBDC research as part of his crypto executive order in March of the previous year.
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Republicans in both the House and Senate – including Tom Emmer, Ted Cruz, and others – have consistently opposed CBDCs due to their potential to eliminate cash and infringe on consumer privacy. Gabbard – a former member of the Democratic party – reiterated this perspective on Monday, 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 remarked, “whether it’s a stick of gum, or an automobile, or anything in between.”
Federal Reserve Chairman Jerome Powell mentioned in September that a CBDC, if introduced, would protect transaction privacy while still verifying the identities of its users.
FedNow VS CBDCs
The former congresswoman noted that the Federal Reserve’s new FedNow service – a 24/7 real-time payments service for depository institutions – is the initial step toward a CBDC. However, the central bank issued a statement on Friday clarifying that FedNow is not connected to digital currency nor intended to replace cash, and is more akin to existing services like Fedwire and FedACH.
European Central Bank President Christine Lagarde has previously recognized that innovation in the payments sector – particularly in the form of CBDCs – would be essential to ensure that central banks remain relevant. In contrast, she has dismissed conventional decentralized cryptocurrencies like Bitcoin as “highly speculative assets,” lacking any future.
Gabbard has reportedly invested in cryptocurrency in the past, acquiring both Ether and Litecoin at the height of the December 2017 bull market.
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