Economist Paul Krugman asked why Republican Florida Governor Ron DeSantis opposes a central bank digital currency (CBDC) in a recent op-ed.Krugman suggested that DeSantis may be motivated by “general paranoia.” He speculated that DeSantis might be swayed by people who fear that a digital currency will hamper “unawakened activities such as tax evasion and money laundering.”
Referring to CBDCs as ‘woke’ money, Krugman attacks ‘monetary conspiracy theory types’
Economist Paul Krugman, who follows the Keynesian school of economics, wrote an op-ed criticizing Florida Governor Ron DeSantis’ opposition to a central bank digital currency (CBDC).Krugman noted that the United States does not yet have a CBDC, but the Federal Reserve is studying the idea.Krugman argued that if the Fed creates a CBDC, it’s “highly unlikely that any state government would have the right to prohibit its use.” He also pointed out that the current financial system is already largely digital.
Krugman observed that some people don’t have bank accounts or don’t trust banks, and he finds it “weird” that people still use so much cash.
He speculated that “the vast hoard of Benjamins there is held by people who want to avoid the reporting requirements of banks in order to hide activities such as tax evasion, illegal purchases of drugs and arms, extortion, etc.” While Americans keep a significant amount of cash “in their home safe”, Krugman believes the practice is “increasingly annoying in the digital age”.
Nobel laureate Krugman suggested that bitcoin (BTC) was trying to achieve the goal of a cash-like digital currency, but he referenced the Reserve’s cryptocurrency analysis federal in 2022.The Fed report said that because crypto assets are volatile, they struggle to gain adoption and “make consumers vulnerable to loss, theft, and fraud.” Krugman argued that DeSantis’ opposition to CBDCs was not intended to protect the rights of Floridians, but rather would “protect the ability of criminals to evade taxes, launder money, buy and selling illegal drugs and engaging in extortion”.
Six days after Krugman’s opinion piece was published, he
told a story about a man standing in line in front of his wife at a cafe and “ranting” about how the CBDCs “are going to take away our freedom.” Krugman speculated that “DeSantis is likely tied to a broader push of monetary conspiracy theory types.It’s actually been a right-wing thing for a while, although the theories are getting crazier and crazier.
What do you think of the potential pros and cons 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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