🟪 TBD: CBDC

So much for a US central bank digital currency — at least for now.

According to a new executive order from the Trump White House, federal agencies are "prohibited from undertaking any action to establish, issue, or promote CBDCs within the jurisdiction of the United States or abroad."

Further, any CBDC efforts within those agencies were also given the boot by the EO. This reversed work that may or may not have begun under Biden after his 2022 executive order on digital assets. Any such work will likely be binned or mothballed. 

The latter element is likely less impactful, as the only entity within the US governance structure working on CBDC reserve is the Federal Reserve — which, under national law, is quasi-governmental in nature and not part of the executive branch.

Still, it’s a big statement: no CBDCs. 

Such a move isn’t surprising. Political mobilization against CBDCs began early in the presidential season. Florida Governor Ron DeSantis’ failed bid notably featured an anti-CBDC message that Trump later adopted. 

The messaging was attractive and certainly played to many crowds, and not just the crypto ones. The surveillance aspects inherent to a CBDC design — a digital currency supervised wholly by the central money manager — likely didn’t sit well with those already suspicious of the government. Considering the vast payments surveillance already in place, one more layer perhaps felt like too much.

But is the Trump EO the end of a US CBDC? Not quite.

The order actually leaves a pretty big carveout — "except to the extent required by law" — meaning that if Trump and the GOP decided to go ahead with a design more to their fancy, they could do so without running against their own message. It’s quite possible that the work done at the Fed — which, again and again, pointed to Congress when it came to questions of whether it would ever produce a digital dollar — could then come into play.

But don’t hold your breath. Stablecoins, I think, more than meet the moment a US CBDC might merit. Plus, wouldn’t Trump prefer we use TRUMP before some kind of Fedcoin? One wonders.

And now, onto the round-up:

— Michael McSweeney

The stakes have never been higher. As markets evolve and policy takes shape, Mohamed El-Erian will cut through the noise on macro trends. Anthony Scaramucci will unpack the changing face of finance and crypto. Kristin Smith will lay out the hard truths about regulation and its ripple effects.

📅 March 18-20 | NYC