Economist Paul Krugman questioned why Republican Florida Governor Ron DeSantis opposes a central bank digital currency (CBDC) in a recent opinion editorial. Krugman suggested that DeSantis may be motivated by “general paranoia.” He speculated that DeSantis may be influenced by people who fear that a digital currency could hamper “non-awake activities like tax evasion and money laundering.”
Referring to CBDCs as ‘woke’ money, Krugman attacks ‘currency conspiracy theory types’
The economist Paul Krugman, who follows the Keynesian school of economics, wrote a opinion piece criticizing Florida Governor Ron DeSantis’ opposition to a central bank digital currency (CBDC). Krugman noted that the US does not yet have a CBDC, but the Federal Reserve is exploring the idea. Krugman argued that if the Fed creates a CBDC, it is “highly unlikely that a state government would have the right to prohibit its use.” He also pointed out that today’s financial system is already largely digital.
Krugman noted that some people don’t have bank accounts or trust banks, and finds it “strange” that people still use so much paper money. He speculated that “the vast number of Benjamins out there are in the hands of people who want to avoid bank reporting requirements to hide activities like tax evasion, illegal drug and gun purchases, extortion, etc. “. While Americans keep a significant amount of cash “in their home safes,” Krugman believes this practice is “increasingly annoying in the digital age.”
Nobel laureate Krugman suggested that Bitcoin (BTC) attempted to achieve the goal of a cash-like digital currency, but referenced the Federal Reserve’s 2022 cryptocurrency analysis. He fed report He stated that because crypto assets are volatile, they struggle with adoption and “make consumers vulnerable to loss, theft, and fraud.” Krugman argued that DeSantis’s opposition to CBDCs is not intended to protect the rights of Floridians, but rather “would protect the ability of criminals to evade taxes, launder money, buy and sell illegal drugs, and extort.”
Six days after Krugman’s op-ed was published, he told a story about a man who was in front of his wife in line at a coffee shop and was “ranting” about how CBDCs are “going to take away our freedom.” Krugman speculated that “DeSantis is likely related to a broader push from the currency conspiracy theory types. This has actually been a right-wing thing for a while, even if the theories are getting crazier and crazier.”
What are your thoughts on the possible benefits and drawbacks of a central bank digital currency? Do you agree with Krugman or DeSantis? Share your thoughts on this topic in the comments section below.
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