Former President Donald Trump has elevated the discussion around Central Bank Digital Currency (CBDC) to the forefront of the political stage. In a recent event, he pledged to prevent the creation of a CBDC, citing it as a threat to freedom. This unexpected focus raises questions about what a CBDC is, why Trump is addressing it now, and its connection to Bitcoin and the future of currency.
Essentially, a CBDC is a government-created digital dollar, which, despite its initial appearance, raises significant concerns about privacy and freedom by giving the government digital control over consumer bank accounts. The programmable nature of CBDCs offers governments the ability to finely target stimulus packages and manage money efficiently. However, it also opens the door to potential manipulation of spending and even turning it on and off.
China, the first major economy to launch a CBDC, exemplifies the risks, with plans to exploit programmable features, allowing control over money expiration, spending restrictions, and ties to social credit scores. This centralized control has drawn bipartisan opposition in the United States, with nearly 75% of Americans opposing a government-backed digital dollar, according to a recent survey.
Trump’s vocal stance against CBDCs appears strategic, aiming to rally support against perceived government overreach. It also positions him against President Joe Biden, who has shown interest in researching a potential U.S. CBDC. Trump’s anti-CBDC stance aligns with pro-privacy sentiments, tapping into a potentially influential voting bloc: the Bitcoin vote.
With an increasing number of Americans owning digital assets, Bitcoin enthusiasts have become a political force. In the upcoming 2024 campaign, these voters, once a small fraction, now represent a substantial demographic. Trump’s next move could involve embracing Bitcoin, securing support among pro-privacy Americans and tapping into the influential crypto vote. This shift aligns with the changing landscape, where digital asset enthusiasts are emerging as a significant political force, capable of influencing key battleground states.
In states like New Hampshire, Nevada, Ohio, and Pennsylvania, where digital asset ownership is notable, the crypto vote could sway election outcomes. Recent polling indicates that a considerable percentage of voters in these states owning digital assets prioritize candidates supportive of crypto values. This coalition, potentially comprising 1.9 million voters, holds substantial influence in states decided by narrow margins in the 2020 election.
While Trump has criticized digital assets previously, there’s evidence of a potential shift in his stance. His engagement in the crypto space, such as launching his NFT collection, suggests a willingness to explore crypto as a political tool. Embracing a pro-Bitcoin agenda could open up new voter demographics and financial backing from cryptocurrency-aligned Super PACs.
Embracing Bitcoin, seen as a low-risk, high-reward political move, aligns with opposing CBDCs and resonates with a broad spectrum of Americans. As Trump navigates this potential strategy shift, the political landscape may witness the emergence of Bitcoin as a pivotal factor in the upcoming election.
