Progressive Democrats who think the federal government should control everyone’s lives are pushing for the creation of a central bank for digital currencies.
Far-left Rep. Maxine Waters, who currently chairs the Financial Services Committee, has been a long-time critic of cryptocurrency due to its unregulated nature. She recently revealed that congressional Democrats have started a working group that aims to work with regulators to dig into the industry. It would surprise no one if the working group came up with proposals for ways that the government could control the growing crypto industry to suit its wishes.
Even so, it’s Sen. Elizabeth Warren’s current interest in central bank cryptos that is truly concerning.
Sen. Warren says that “legitimate” (aka government-controlled) digital public money could improve “financial inclusion” and improve the safety of the nation’s financial system. However, problems arising from giving the federal government even more control over the financial system would be far worse than the problems many Democrats say they want to resolve.
Supporters of central bank cryptos give many altruistic reasons for their support. They say it would enable the government to deliver immediate aid to people who don’t have bank accounts. It could facilitate the use of “smart contracts” and facilitate the distribution of tax refunds and Congressional stimulus packages.
However, what’s often left unsaid is the fact that central bank cryptos would give the federal government expanded access to the wallets of every single person connected to the system. The rich could be immediately taxed and the money redistributed to suit progressive wishes. The government would be able to monitor financial transactions and even interfere with those they don’t like.
This interference would likely not be limited to putting a stop to money laundering and other illegal activities. As former President Barack Obama and President Joe Biden have already shown, Democrats are more than willing to try to stop industries they don’t like from gaining access to needed financial services. The oil and gas industries are some of the most obvious examples of this.
Digital currencies rose to prominence specifically as a way to fight back against government regulation of currency. The entire reason currencies like Bitcoin are so popular is that the government hasn’t gotten its hands all over it yet. Placing the heavy hand of government control over this industry will only drive it underground.
Individuals who have invested in this technology should be allowed to flourish on their own merit — just like with every other industry.