Several policymakers oppose central bank digital currencies while the FED studies the possibility of creating one. This is the case of the Republican Governor of Florida, Ron DeSantis. The politician has openly expressed his opposition to CBDCs. This drew criticism from Nobel Prize-winning economist Paul Krugman. Check out Krugman’s take on CBDCs.
Opponents of CBDCs would especially fear their power against illegal activities!
While some argue that CBDCs would threaten the privacy of Americans, Paul Krugman seems to trust them. The Economist indicated in a recent opinion piece that Ron DeSantis is not right to oppose CBDCs. He said his opposition is the result of a “general paranoia“. “DeSantis is likely linked to a broader push by currency conspiracy theorists. This has actually been a right-wing trend for some time, although the theories are getting crazier and crazier“, explained the economist.
According to Krugman, CBDCs will surely hinder the “unawakened activities such as tax evasion and money laundering“. Also, those who oppose these digital currencies just fear that they will serve this function. Krugman noted that CBDCs constitute a currency “awake“. So he disagrees with those who link them to monetary conspiracy theory. He highlighted thatno state government would have the right to prohibit the use of a CBDC created by the FED.
Moreover, the economist believes that the current American financial system is already largely digitized. In this context, it seems abnormal that some people still use so much cash. Krugman believes that the vast stock of banknotes is held by suspicious people.
Indeed, according to him, these lastwant to avoid bank reporting obligations“. They seek toconceal activities such as tax evasion, illegal purchase of drugs and weapons, extortion, etc.“. For the Nobel laureate, keeping a significant amount of cash in the digital age is boring.
Paul Krugman seems to think CBDCs would be a big draw in the near future. That said, the Economist believes that through his opposition to CBDCs, the Governor of Florida seeks to protect criminals. According to him, central bank digital currencies would help prevent them from evading taxes or laundering money. They would also prevent them from buying and selling illegal drugs or engaging in extortion.
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