CBDCs Banned

Plus: Crime prevention, JFK assassination files, and more...

Strong repudiation of CBDCs: In an executive order released yesterday (called "Strengthening American Leadership in Digital Financial Technology"), Trump gave those who care about financial privacy a very clear win.

The Trump administration, through this executive order, commits to "providing regulatory clarity and certainty built on technology-neutral regulations, frameworks that account for emerging technologies, transparent decision making, and well-defined jurisdictional regulatory boundaries, all of which are essential to supporting a vibrant and inclusive digital economy and innovation in digital assets, permissionless blockchains, and distributed ledger technologies." No more constant persecution of the industry by the Securities and Exchange Commission (SEC).

Crucially, it also says it will "protect Americans from the risks of Central Bank Digital Currencies (CBDCs), which threaten the stability of the financial system, individual privacy, and the sovereignty of the United States, including by prohibiting the establishment, issuance, circulation, and use of a CBDC within the jurisdiction of the United States." Yep, you heard him right: CBDCs are banned now.

Governments around the world—China, Russia, India, Sweden, and the United Arab Emirates—have either introduced CBDCs or recently toyed with doing so. In the U.S., too, central bankers have perennially signaled interest: "'The Federal Reserve's initial analysis,' the central bank insisted in a January 2022 report, 'suggests that a potential U.S. CBDC, if one were created, would best serve the needs of the United States by being privacy-protected, intermediated, widely transferable, and identity-verified,'" wrote Reason's Brian Doherty in a January 2023 feature. "That last point is the danger zone. To use cash, you merely have to convince your counterparty that the cash is cash; you do not have to convince them you are you. In a digital system whose capacities to surveil and control are nearly unlimited, identity verification looks frightening indeed."

Consider in which ways central planners might try to control your behavior if a CBDC were widely adopted. "Authorities could bake in faddish, top-down social goals that you—the sucker who merely wants to spend your money to meet your needs and desires—want nothing to do with," continues Doherty. "These could concern the environment (do you really need to buy that much carbon-generating stuff in a month?), safety (guns and gun accessories not FedCoin-compatible at this time) or 'equity' (let's make sure the right percentage of your spending goes to counterparties with the approved racial or gender mix)."

Meanwhile in the Senate: A new first-of-its-kind Senate Banking subcommittee has been created, focusing specifically on digital assets and chaired by longtime crypto advocate Sen. Cynthia Lummis (R–Wyo.).

"Digital assets are the future, and if the United States wants to remain a global leader in financial innovation, Congress needs to urgently pass bipartisan legislation establishing a comprehensive legal framework for digital assets and that strengthens the U.S. dollar with a strategic bitcoin reserve," said Lummis in a statement following her appointment.

The Senate Banking digital asset subcommittee will:
✔️ Pass legislation promoting responsible innovation and consumer protection
✔️ Eradicate Operation Chokepoint 2.0
✔️ Make America the bitcoin and digital asset capital of the world

— Senator Cynthia Lummis (@SenLummis) January 23, 2025

Though Lummis' new role—and the creation of this subcommittee—is a welcome development, the establishment of a Strategic Bitcoin Reserve (or SBR) is a bit controversial. "A Bitcoin reserve would not bolster the dollar. Unlike other countries, the US issues the global reserve currency," writes investor (and Just Asking Questions guest) Nic Carter. "It might make sense, if you are Russia or Iran, to consider an un-seizable asset in your FX reserves, especially after the US confiscated Russia's treasuries in 2022. But the US does not need to hedge its exposure to the dollar, because it itself issues the dollar. Acquiring Bitcoins and assigning them a monetary role—whether as FX reserves or something more significant—would imply the US is losing confidence in the current dollar-based system." This, notes Carter, would "throw the system into chaos" and markets would react in such a way that the cons would surely outweigh the pros. (More here.)

---

Scenes from New York: "The key to effective crime prevention is to effectively delink society's problems from criminal activity," writes former Baltimore cop and current criminal justice professor Peter Moskos at Vital City. "Focus not on so-called 'root causes' but on proximate causes. We can't wait to fix society's intractable problems, given our seeming inability to accomplish that."

"Murders on the subway remain rare—10 in 2024—but if you ride the subway and think things used to be safer, you are correct," he continues. "There were zero subway murders in 2017, and two or fewer every year from 2008 to 2018. Then police in the subway stopped enforcing many of the rules. In the name of social and racial justice, New York City, in essence, gave up its commitment to public safety."

---

QUICK HITS

• "President Trump announced that he'll declassify any remaining files from the assassinations of President John F. Kennedy, his brother Robert F. Kennedy and civil rights leader Martin Luther King Jr.," reports CBS News. "He signed an executive order at the White House Thursday." Both the attorney general and the director of national intelligence will spend quite a few weeks coming up with a plan for the release of the documents, so expect a bit of a lag in terms of when people can actually dig in.
• "US District Judge John Coughenour in Seattle called Trump's executive order 'blatantly unconstitutional' and questioned the quality of lawyering within the administration," reports Bloomberg. "The order, which Trump signed on his first day in office, denies automatic citizenship to US-born children of immigrants who entered the country illegally or have a temporary legal status."
• No, actually. We don't do this in these parts (America). This is clearly showboating—there's no reason to believe such sycophantic nonsense will pass—but it's corrosive, bad showboating that shows blatant disregard for crucial constitutional limits on executive power.

I just introduced a resolution to amend the 22nd Amendment to allow President Trump to seek a third term. Read the details.????https://t.co/OTacpt3ggE

— Rep. Andy Ogles (@RepOgles) January 23, 2025