In a recent op-ed, economist Paul Krugman questioned why Republican Florida Governor Ron DeSantis opposes a central bank digital currency (CBDC). Krugman suggested that DeSantis may be motivated by “general paranoia.” He speculated that DeSantis may be influenced by individuals who fear that digital currency will inhibit “unawakened activities such as tax evasion and money laundering.”
Referring to CBDC as “Woke” money, Krugman attacks “currency conspiracy theory types”
Keynesian economist Paul Krugman wrote an opinion articlecriticizing Florida Governor Ron DeSantis for his opposition to central bank digital currency (CBDC). Krugman noted that the United States does not yet have a CBDC, but that the Federal Reserve is exploring the idea. Krugman argued that if the Fed created a CBDC, “it is highly unlikely that state governments would have the right to prohibit its use.” He also noted that the current financial system is already largely digital.
Krugman noted that some people do not have bank accounts or do not trust banks, and he finds it “odd” that people still use so much paper money. He speculates that “the vast hoard of Benjamins out there are held by people who want to avoid bank reporting requirements in order to hide activities such as tax evasion, illegal purchases of drugs and weapons, and extortion.” Americans keep a significant amount of cash “in their home safes,” but Krugman believes this practice is “becoming increasingly annoying in the digital age.”
Nobel laureate Krugman suggested thatBitcoin (BTC)tried to achieve the goal of a cash-like digital currency, but referred to the Federal Reserve’s 2022 analysis of cryptocurrencies. Thatsaid the Fed reportsaid crypto assets are unstable and will struggle to be adopted, making “consumers vulnerable to loss, theft, and fraud.” Krugman argues that DeSantis’ opposition to the CBDC is not about protecting the rights of Florida citizens, but rather “protecting the ability of criminals to evade taxes, launder money, traffic in illegal drugs, and commit extortion.”
Six days after Krugman’s opinion piece was published, heintroduced a storyabout a man standing in line in front of his wife at a coffee shop who “ranted” that the CBDC was “taking away our freedom.” Krugman speculates that “DeSantis is probably tied to a broader push by financial conspiracy theory types. This has actually been a right-wing thing for a while, even if the theories keep getting crazier.
What are your thoughts on the potential advantages and disadvantages of central bank digital currencies, do you agree with Krugman or DeSantis? Share your thoughts on this subject in the comments section below.
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