- Gov. Ron DeSantis on Monday condemned the Federal Reserve for potentially implementing a central bank digital currency (CBDC) without specific authorization from Congress, stating it is constitutionally required for major policy changes.
- Florida Senate Bill SPB 7054 aims to protect Floridians’ privacy and rights by prohibiting a U.S. Federal Reserve CBDC or foreign CBDC from being treated as money under the Florida Uniform Commercial Code (Florida UCC).
- The U.S. Constitution grants Congress exclusive power to regulate currency, and CBDCs are gaining increased attention as digital currencies in recent years.
Gov. Ron DeSantis joined lawmakers on Monday in pushing back against potential central bank digital currency (CBDC) financial systems, firing off a tweet condemning the Federal Reserve after it stated it would implement such a currency if the U.S. Congress and the Executive Branch supported it.
“It is not merely “ideal” that major changes in policy receive specific authorization from Congress; it is constitutionally required,” said DeSantis. “Unaccountable institutions cannot impose a CBDC on Americans. They will tell us that CBDC won’t be abused but we are wise enough to know better.”
Meanwhile, Florida Senate Bill SPB 7054, introduced by the Banking and Insurance Committee, aims to protect Floridians’ privacy and rights by prohibiting a United States Federal Reserve CBDC, if one is developed, and foreign CBDC from being treated as money under the Florida Uniform Commercial Code (Florida UCC).
The bill defines CBDC as a digital currency issued by the U.S. Federal Reserve, foreign reserve system, or other specified entity, or that is processed or validated directly by them and excludes CBDC from the definition of “money” in the Florida UCC.
The United States Constitution provides Congress with the exclusive power to regulate currency, including the power to coin money, regulate its value, and fix the standard of weights and measures. Congress has historically exercised this authority through various legislation, including the Mint Act of 1792, which established the U.S. coinage system and the dollar as the unit of U.S. currency, and the Federal Reserve Act of 1931, which codified the Federal Reserve System and authorized the issuance of Federal Reserve notes.
Money in the U.S. takes multiple forms, including central bank money issued by the Federal Reserve, commercial bank money held in accounts at commercial banks, and nonbank money held as balances at nonbank financial service providers. The digital processing of credit and debit card transactions and the creation of banking apps have led to the digitization of many cash-based transactions. The use of digital currencies, including CBDCs, has gained increased attention in recent years.