US President Donald Trump has issued an executive order prohibiting the creation and issuance of Central Bank Digital Currency (CBDC) within the United States.
During his campaign for the US Presidential Elections, Trump frequently expressed his intention to ban CBDCs if he were elected.
The executive order defines CBDC as “a form of digital money or monetary value, denominated in the national unit of account, that is a direct liability of the central bank.”
It outlines several concerns associated with CBDCs, including risks related to privacy, sovereignty, and financial stability.
In place of CBDCs, the order advocates for the development of a robust digital asset ecosystem driven by the private sector, with a specific focus on dollar-backed stablecoins as an alternative.
According to a report from Yahoo News, a new executive order has been issued that revokes a 2022 action taken by former President Joe Biden, which aimed to establish a framework for exploring the regulation of digital assets, including potential Central Bank Digital Currencies (CBDCs).
This recent order aligns with former President Donald Trump’s campaign promises to the cryptocurrency sector, where he pledged to oppose CBDCs and advocate for Bitcoin.
Additionally, he granted a full pardon to Ross Ulbricht, the founder of Silk Road, fulfilling another campaign commitment.
During a televised announcement, Trump emphasized his objective of positioning the United States as a global leader in digital financial innovation.
He also hinted at other initiatives related to cryptocurrency, suggesting the goal of ensuring that Bitcoin is “Made in the USA,” although specific details regarding this initiative have yet to be disclosed.
While this executive order establishes a definitive approach to digital currencies, it also raises questions about the extent of presidential authority in implementing such sweeping policies.
Previous courts have challenged Trump’s executive actions, notably his attempt to rescind birthright citizenship.
As the newly formed working group starts its efforts and legislative discussions advance, the long-term implications of this policy will become clearer.
