Central bank digital currencies were once looked upon as nothing short of the future of money around the world. Yet at least in the U.S., that sunny outlook for CBDCs is in serious doubt for one simple reason: Donald Trump and his Republican allies hate them.
Along with Trump’s newfound support for cryptocurrencies comes a disdain for the idea of creating a digital dollar, a sentiment prominent among executives in the industry who rage against CBDCs as dangerous surveillance tools of the state because their usage can be tracked by authorities. Of course, digital forms of fiat currencies also present major competition for the industry since they undermine major use cases for crypto by allowing for the elimination of financial intermediaries and faster, simpler transmission of money.
Yet Trump’s vow to never allow the dollar to be digitized carries significance far beyond the crypto world: It may turn money into a new front in the former president’s trade war with China, which has emerged as a leader in the nascent world of CBDCs.