Florida Defines ‘Money,’ Passes Bill to Ban a Central Bank Digital Currency

Florida Gov. Ron DeSantis delivers remarks during the New Hampshire GOP's Amos Tuck Dinner in Manchester, N.H., on April 14, 2023. Scott Eisen/Getty Images

Florida’s House of Representatives passed a bill that seeks to ban the use of a central bank digital currency (CBDC) in the state, which is in line with Republican governor Ron DeSantis’s stance on the matter.

The bill SB 7054 (pdf) defines the term “central bank digital currency” and revises the term “money” to make CBDCs illegal. “’Money’ means a medium of exchange that is currently authorized or adopted by a domestic or foreign government. The term includes a monetary unit of account established by an intergovernmental organization or by agreement between two or more countries. The term does not include a central bank digital currency,” according to the bill.

This essentially blocks CBDCs from being treated as legal tender in Florida under the state’s Uniform Commercial Code. The House passed the bill on Tuesday with a majority vote of 116–1.

The bill was earlier passed by the Senate late last month with a vote of 34–5. It now heads to the desk of Governor DeSantis for signature. The bill comes after he called for outlawing CBDCs in March.

On March 20, DeSantis warned that CBDCs were aimed at controlling the behavior of Americans. “How do we know? Because we’ve seen this happen in other parts of the world. Look no further than China, in seeing the impact of centralized digital currency,” he said.

“The People’s Bank of China uses its central bank to monitor citizen behavior, allowing for the surveillance of spending habits and to cut off access to goods and services.”

A bill analysis (pdf) cites President Joe Biden’s March 9 executive order that asked federal agencies to assess and report the potential benefits and risks of implementing a CBDC in the United States.

“Ten banks working with an organization that is part of the Federal Reserve Bank of New York recently participated in a test for 12 weeks of an interoperable digital money platform that operates exclusively in U.S. dollar,” the analysis said.

Financial Surveillance

During a visit to Jacksonville, Florida, on Tuesday, DeSantis vowed to prohibit any federal attempt to impose CBDCs. “I think what the danger of digital currency is that they want to make that the sole currency. They want to get rid of crypto,” he said.

“My view is, if you want to invest in crypto, it’s up to you. You can do it. You can make those decisions. They don’t like crypto because they can’t control crypto. So, they want to put everything in a central bank digital currency.”

“I guarantee you, if they are able to ever get away with that, they will impose ESG [environmental, social, governance] and social credit scores onto that. And that’s gonna be a huge reduction in freedom for people in this country.”

DeSantis does not believe that Congress will ever authorize a CBDC. But if the Federal Reserve or the Treasury Department attempts to impose it unilaterally, “we’ll have a prohibition against that” in Florida, he said.

“And I think that’s ensuring your financial independence and making sure that we don’t have a financial surveillance state where they know every transaction that you’re making. I think that that’s fundamentally wrong. So, we’re recognizing the dangers with this agenda.”

Privacy Issues

During a speech on April 18, Federal Reserve governor Michelle W. Bowman warned that safeguarding privacy is a “top concern” with regard to CBDCs.

Bowman wants CBDCs to have enough protections to safeguard the privacy of customers and businesses while also being transparent enough to deter criminal activity. The consumer data-privacy protections embedded in present-day payment systems must be “extended” to future systems, she said.

A recent analysis by the Cato Institute states that CBDCs pose a foundational threat to America’s economic systems with absolutely no upsides.

“The costs are so high and the benefits are so low” when it comes to a government-issued CBDC. Such a currency would ultimately usurp the private sector and endanger the core freedoms of Americans, it said.

“Therefore, it should have no place in the American economy. Congress should explicitly prohibit the Federal Reserve and the Department of the Treasury from issuing a CBDC in any form.”