How Durbin & Co. Credit And Debit Card Controls Could Pave The Way For CBDCs

Central Bank Digital Currency – the digital form of a national currency that tracks transactions within a government digital ledger – is an idea that seems to be losing whatever modicum of support it had among the general public in countries across the world. As Ari Patinkin and I write in RealClearMarkets, “from the U.S. to Europe to Africa – more and more of the general populace are rejecting CBDCs as they learn what they would entail and experience them in practice.” In the U.S., just 16 percent support a CBDC issued by the Federal Reserve, according to a recent Cato Institute poll. Opposition rises even further in the poll when Americans are informed that CBDCs can be used for nefarious tasks such as monitoring personal spending and controlling the ways people spend their money.

Yet we shouldn’t count out a U.S. imposition of CBDCs yet. For reasons of both ideology and rent-seeking on behalf of certain businesses, much of the political and financial elite supports them. This coalition of business and government officials supporting more state intervention is described in a popular new country song as the “Rich Men North of Richmond,” and its singer-songwriter Oliver Anthony also expressed the sentiments of many when he decried in a recent Free Press interview the cronyist “corporations who work with our government.” Yet this coalition motivated by both ideological and rent-seeking desires has ways ways of setting the stage for policy proposals to expand governmental powers