Donald Trump Is Right to Hate CBDCs — They Could Take Your Money

• Trump has called CBDCs a “dangerous threat to freedom” due to potential government overreach.
• Critics argue that CBDCs could enable mass surveillance, restrict financial autonomy, and allow governments to control or freeze individual assets.
• Privacy-focused blockchain technologies are emerging as potential solutions to safeguard financial freedom in the face of increasing centralization.

The dust is settling surrounding Trump’s inauguration. After signing 26 executive orders on the day of his inauguration, it is clear that he intends to honor his promises.

Trump promises to protect Americans from “government tyranny” and “never allow” their creation, citing CBDCs as a “dangerous threat to freedom ” in his pre-election speech. 

Love him or hate him, he raises an important question一are CBDCs a threat to personal freedom?

Trump Calls CBDCs “Dangerous”

In accordance with his campaign commitment, Donald Trump granted Ross Ulbricht , the founder of the Silk Road, a full and unconditional pardon.

He also signed an executive order banning the creation and issuance of Central Bank Digital Currencies (CBDCs) in the United States, citing them as a “dangerous threat to freedom.”

 “A currency like this would give our federal government absolute control over your money […] They could take your money, and you wouldn’t even know it was gone,” Trump elaborated. 

Proponents of CBDCs argue that there are a plethora of benefits, such as the fact that it is becoming incredibly difficult to counterfeit and create greater economic integration.

What Are CBDCs In the First Place?

CBDCs are primarily categorized into two types: wholesale and retail. Wholesale CBDCs are designed for financial institutions to facilitate large-value transactions such as interbank transfers and settlements.

On the other hand, retail CBDCs are intended for the general public, enabling individuals and businesses to conduct everyday transactions digitally.

They serve as a digital equivalent of cash, providing a secure and convenient payment method for daily use.

In this piece, when I refer to Central Bank Digital Currencies, I am specifically discussing retail CBDCs.

They are electronic renditions of fiat money that are created and supported by the respective nation’s central bank.

These currencies utilize the benefits of blockchain technology to reduce transaction fees and feature near-instantaneous settlement speeds at no cost to existing stability.

While the concept of CBDCs may seem promising, their implementation introduces major concerns regarding privacy, autonomy, and the freedom of its citizens.

Privacy Protections at Risk

A report by the Cato Institute highlights that “a CBDC could spell doom ” for few financial privacy protections remain.

This centralization of financial power would give governments the ability to track every single transaction and program their currency to be spent on only whitelisted items.

In turn, this raises justified fears worldwide over surveillance and the extreme risk to citizens’ freedoms should a government evolve into a ‘nanny state.’

The ability to ‘program’ CBDCs to restrict user spending, freeze assets , or impose conditionalities when spending- represents a fundamental shift in financial autonomy.

For instance, while targeted stimulus payments may seem beneficial, they also open the door to more invasive forms of control, such as limiting where and how individuals can spend their money.

This would effectively enable the state to choose how it interacts with the world; governments could take control of an economy during recession periods with hyperinflation, currency devaluation, or capital flight . 

This could be done by preventing currency conversions or limiting international transactions to ensure domestic spending, in addition to restricting the amount of money you may be able to withdraw/spend when banks are at risk of collapse. 

A Historical Reminder

As many in the crypto community know, back in 1933, the U.S. government forced people to sell good reserves for fiat during the Great Depression.

President Franklin D. Roosevelt issued Executive Order 6102, which made it illegal for folks to hoard gold coins, bullion, and certificates.

People had to turn in their gold to the Federal Reserve in exchange for paper money. This move was aimed at stabilizing the economy by increasing the money supply.

Today, many in the crypto world see this as a reminder of how governments can intervene in personal assets, highlighting the appeal of decentralized digital currencies that operate beyond centralized control.

On a broader view, the sheer concentration of data in the hands of central banks highlights a substantial opportunity for citizen mass surveillance and could lead to dramatic privacy risks and data breaches from cyber attacks, god forbid from foreign powers.

A CBDC could establish a direct link between citizens’ financial activities and the federal government, raising alarms about privacy and the misuse of personal financial data.

These concerns highlight the real potential of governmental overreach that can remove citizens’ financial freedom and privacy by controlling spending.

Official legislative actions to counteract this, such as the introduction of the CBDC Anti-Surveillance State Act , reflect these apprehensions.

Examining Decentralized Alternatives to CBDCs

As concerns over CBDCs grow, discussions around individual financial freedom and alternatives to ensuring autonomy have also gained traction.

One growing conversation involves whether decentralized technologies, such as Privacy-oriented blockchains, can offer an alternative to maintain citizens’ financial autonomy.

These blockchains are able to maintain autonomy despite CBDC concerns, emphasizing user privacy by ensuring transactions remain confidential.

Obfuscating transaction details via methods like ring signatures, stealth addresses, and confidential transactions ensures the transaction, amount, address, and asset time remain untraceable.

Safeguarding Financial Privacy in the Digital Age

CBDC risks underscore the importance of carefully considering the implications of new technologies on your personal liberties.

If the wrong individuals control this force, their incorporation can accidentally reshape the economy, exacerbating already unprecedented levels of economic inequality and social unrest.

As digital currencies continue to evolve, governments and financial institutions must weigh the benefits of innovation against the risks to privacy and financial autonomy.

The future of money should be shaped by a balanced approach that ensures both security and personal freedom.