Diehard Bitcoiners and CBDC advocates will probably never see eye to eye. And increasingly, the digital currency dividing line maps directly onto a split between the Republican and Democratic parties.
Planting his flag firmly in the pro-Bitcoin camp, OpenAI CEO Sam Altman has said the cryptocurrency’s advance is “super logical.” Meanwhile, the tech entrepreneur came out strongly against CBDCs.
In a recent episode of Joe Rogan’s podcast, Altman said “I’m excited about Bitcoin.”
Explaining his thinking on the topic, he said “The idea that we have a global currency that is outside the control of any government is a super logical and important step on the tech tree.”
Given his skepticism of government-controlled currency, it follows that Altman’s excitement for digital currency doesn’t extend to the realm of CBDCs.
Stating that he is “super against” CBDCs, Altman’s fear that the technology could lead to unprecedented government control of the monetary system echoed an increasingly popular rallying cry among the Republican party.
In line with the party’s broadly libertarian economic stance and its traditional objection to financial surveillance, during the Biden Presidency, several prominent Republicans have emerged as fierce opponents to a central bank-issued digital dollar.
Among the most vocal CBDC critics, the likes of Tom Emmer and Ted Cruz have introduced legislation to Congress designed to block the US Federal Reserve from creating its digital currency.
For example, in September, Emmer reintroduced the CBDC Anti-Surveillance State Act in the House of Representatives. Arguing that “President Biden is willing to compromise the American people’s right to financial privacy for a surveillance-style CBDC,” the bill would prohibit the Fed from issuing digital currency directly to individuals.
Meanwhile, in the Senate, Cruz proposed similar legislation in March. With the stated intention of ensuring that “big government doesn’t attempt to centralize or control cryptocurrency,” Cruz’s bill painted CBDCs as anathema to American innovation and the decentralized economic model embodied by traditional cryptocurrencies.
Ahead of the 2024 presidential elections, several Republican candidates are using anti-CBDC sentiment in the party to galvanize support.
For example, Ron DeSantis has promised to ban CBDCs if he is elected President of the United States. As Governor of Florida, DeSantis has already signed a bill restricting the use of central CBDCs in the state.
Elsewhere, Republican-controlled legislatures in Alabama, Louisiana, North Dakota, and Texas have all made similar attempts to resist the rise of CBDCs in the US.
Interestingly, both Emmer and Cruz’s respective anti-CBDC bills explicitly pit the emerging digital currency against Bitcoin, further entrenching the view that the two technologies stand for opposed political philosophies.
While many CBDCs borrow aspects of Bitcoin’s technical design, they are fundamentally centralized, running counter to the ethos of decentralization that has long been a hallmark of the crypto movement.
But whereas Republican critics point to this divergence from Bitcoin as a negative thing, the Democrats’ leading CBDC advocate and fierce crypto hawk Senator Elizabeth Warren has made the opposite argument.
According to Waren, the US needs a CBDC precisely because it offers something Bitcoin doesn’t.
For example, during a Senate Banking, Housing, and Urban Affairs Committee hearing in 2021, Warren argued that bitcoin was a “terrible currency” due to its volatility.
Giving the example of a grocery store, she said the store “could take $100 in Bitcoin to pay for groceries, but by the end of the day, the Bitcoin could be worth only $60 in which case the store loses out.”
Later in the hearing, Warren implied that the case for a CBDC and the risks posed by Bitcoin and other private cryptocurrencies including stablecoins went hand-in-hand.
“What this hearing is about is exploring how central bank digital currency could serve the American people,” she said. “But it’s clear […] also that we need to address the threats that cryptocurrencies pose.