Vivek Ramaswamy, an ally of former President Donald Trump and one-time Republican presidential candidate, has described the upcoming digital dollar – central bank digital currency (CBDC) – as a threat to individual freedom.
Ramaswamy and Trump's position
Ramaswamy, who earlier this month suspended his 2024 presidential campaign and endorsed Trump, shared his concerns about central bank digital currencies in an interview with Bloomberg.
“I think central bank digital currency is a threat to freedom in this country because it creates a mechanism for the government to be able to wipe out your bank account or wipe out your dollars if you say or do something that the government doesn't approve of,” Ramaswamy says.
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Beyond his position on central bank digital currencies, Ramaswamy favors a significant reduction in the scope and size of federal agencies such as the US Securities and Exchange Commission (SEC).
Ramaswamy's support extends to the cryptocurrency space, as seen in his December criticism of Gary Gensler, the head of the Securities and Exchange Commission, for what he sees as ineffective cryptocurrency regulations.
In contrast to the narrative that links Bitcoin and digital assets with criminal activities, Ramaswamy asserts that Bitcoin provides an alternative to “America’s broken financial architecture.” He argues that the adoption of cryptocurrencies is consistent with policies that promote economic freedom in the United States
Ramaswamy also made baseless corruption allegations against the Food and Drug Administration (FDA). These comments caused Roivant, a biotech company he founded, to distance itself from the presidential candidate.
When asked about potential incentives for illegal activities through the legalization of the cryptocurrency industry, Ramaswamy points to flaws in current policies and the historical misuse of traditional financial systems by criminals.
He specifically criticized SEC Chairman Gary Gensler, criticizing the regulator's handling of cases like cryptocurrency exchange FTX, and highlighting Gensler's refusal to clarify Ethereum's regulatory status.
Trump's point of view
At a recent rally in Laconia, New Hampshire, Trump reiterated his opposition to central bank digital currencies, in line with Ramaswamy's position.
The Republican Party front-runner has said he would never allow the creation of a central bank digital currency.
Trump has already profited from non-fungible tokens (NFTs), but has stated that he is “not a fan of Bitcoin,” describing it as “highly volatile and dependent on nothing.”
On the Democratic front, Robert F. Kennedy Jr. also has reservations about central bank digital currencies, warning of their potential as tools for surveillance and social control due to the lack of anonymity associated with digital currencies.
In contrast, President Joe Biden has taken a cautious but somewhat forward-looking approach to central bank digital currencies. His Executive Order 14067 issued in April 2022 authorizes the Federal Reserve to evaluate the risks and opportunities of digital assets, including the US central bank digital currency.
CBDC pilot in Spain
While the US trades, Spain's central bank, Banco de España, is moving ahead with its exploration of central bank digital currencies. By collaborating with Cecabank, Abanca and Adhara Blockchain in a six-month pilot, Spain aims to replicate interbank payment processing and settlement using wholesale central bank digital currencies.
Adhara Blockchain, an international company based in the United Kingdom, adds a global dimension to this Spanish initiative. The focus remains on testing the feasibility of a single, wholesale tokenized digital currency and facilitating the exchange of these CBDCs between different central banks. The experience also includes the settlement of simulated token bonds using wholesale CBDC.
