Biden Crypto Executive Order Portends Dollar Destruction, Liberty Erosion | Opinion

If you like what the Biden administration has done to the paper dollar, then you'll love what it could do to a digital dollar.

The odds of that perilous prospect becoming reality increased exponentially on March 9, when the White House introduced its "Executive Order on Ensuring Responsible Development of Digital Assets."

The order might not only foretell the further erosion of the world's reserve currency—and with it the wealth, economic dynamism and power that currency underpins—but the further erosion of our liberties.

It calls for mobilizing the federal bureaucracy to regulate digital assets, including cryptocurrencies, and to prepare for the creation of a U.S. central bank digital currency (CBDC) —an electronic dollar one might hold in a digital account with the Federal Reserve.

The two go hand in hand.

On the regulatory side, the order notes that: "The new and unique uses and functions that digital assets can facilitate may create additional economic and financial risks requiring an evolution to a regulatory approach that adequately addresses those risks." [Emphasis mine.]

Translation: "Nice business you've got there. It'd be a shame if something happened to it." That is, the administration could use the threat of regulation to legally extort players in a booming multi-trillion-dollar digital asset industry—that very growth being the pretext to regulate. This might be the best-case scenario.

Worse, the administration could impose regulations aimed at making cryptocurrencies—which have risen, while the dollar has fallen—less attractive versus today's paper dollar, and tomorrow's potential digital one. That is, it could use regulations to try to kill, or at minimum hamstring, competitors.

There's an irony here. Cryptocurrencies were created in part as a decentralized, non-governmental alternative to fiat money controlled by central banks like the quasi-governmental Federal Reserve. In the view of crypto enthusiasts, the Fed has irresponsibly managed the dollar, inflating it away. Hence the need for Bitcoin. Yet now the U.S. government claims it wants to ensure cryptocurrencies' responsible development? Notwithstanding their unbacked and digital form, cryptocurrencies are antithetical to CBDCs. This should not be lost on anyone.

Nor should we ignore the timing of, and context around, this order.

We're currently experiencing the worst price inflation since the Jimmy Carter era.

America is using its inordinate power over the global financial system to, in large part, cancel Russia from it; the Biden administration urged Justin Trudeau to use his authority to break the trucker convoy to our north, precipitating the de-banking of dissenters from Canadian regime orthodoxy; U.S. authorities had, months earlier, pressed one bank to disclose the transactions of several hundred innocent-but-apparently-presumed-guilty dissenters from American regime orthodoxy, who happened to be in or around Washington, D.C. on January 6, 2021.

The Biden administration's National Strategy for Countering Domestic Terrorism, a response in part to the Capitol Riot, cast dissenters from its rule as actual or would-be domestic terrorists, compelling a whole-of-government effort to pursue them that includes:

exploring ways to enhance the identification and analysis of financial activity associated with domestic terrorists...as well as enhancing engagement with financial institutions on domestic terrorist financing, including through existing provisions of the Bank Secrecy Act.

The administration is also using executive agencies to impose an ESG ("environmental, social and governance") agenda on the financial system and American business.

In short: The dollar is declining. The Biden regime has weaponized or supported the weaponization of the global banking architecture in pursuit of foes foreign and domestic, and is engaged in a War on Wrongthink that arguably mandates it. It is intent on imposing progressivism on Americans by way of its power and control over the U.S. economy.

Now, consider the explicitly monetary side of President Biden's executive order: "My administration places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC."

The administration and the Fed suggest a CBDC could make banking cheaper and more efficient; that it is in our national interest with other countries creating their own digital rivals; and that a CBDC could serve the equity agenda of "financial inclusion" by helping bank the unbanked.

Washington is less forthcoming about the potential downsides.

Consider how Communist China, the most powerful nation to introduce a CBDC, has used it. As The Wall Street Journal reported upon its piloting of the e-CNY, or "digital yuan," the currency:

is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump start.

It's also trackable, adding another tool to China's heavy state surveillance. The government deploys hundreds of millions of facial-recognition cameras to monitor its population, sometimes using them to levy fines for activities such as jaywalking. A digital currency would make it possible to both mete out and collect fines as soon as an infraction was detected.

Avik Roy writes that given the financial surveillance China's CBDC facilitates:

In combination with China's "social credit" system, the e-CNY will also enable China to directly send money to, and take money from, favored and disfavored individuals. People and businesses who speak out against the government can have their bank accounts instantly wiped out and find themselves de-platformed from economic life.

Given the aforementioned trendlines, would America's Ruling Class be able to resist the temptation to use a CBDC similarly to achieve its desired ends?

An American CBDC could allow the Fed to debase the currency effortlessly and at warp speed, while manipulating economic behavior as China's expiration mechanism suggests. That the Fed could digitally devalue money is treated by CBDC proponents as a feature of an American CBDC, rather than the most destructive kind of bug.

Take it from President Biden's failed first pick to head the office of the comptroller of the currency. As Roy reports, radical Saule Omarova published a paper in 2020 championing CBDCs, noting that they would allow the Fed to:

"fully replace—rather than compete with—private bank deposits" and to establish Fed control over "the very process of generation and allocation of financial resources...directly crediting and debiting the accounts of all participants in economic activity.

...Once the Fed has control of all Americans' savings and checking accounts, she writes, it will be able to "function as a hybrid of a sovereign wealth fund and a private equity firm," printing money to spend on infrastructure projects like high-speed rail.

The Omarova nomination tells you everything you need to know about the Biden administration's views on money and its essentiality to control.

As for civil liberties, one observer aptly described CBDCs as "a surveillance tool disguised as a payment mechanism." As in China, an American CBDC could enable authorities to hoover up information on all of our transactions—serving as the ultimate spying tool. Who is to say authorities wouldn't take the next step and freeze or seize accounts of political undesirables—Wrongthinkers recast as domestic enemies?

In recent years, the leaders of public- and private-sector power centers have weaponized their institutions against perceived foes. They have engaged in substantial pandemic power-grabs. They have undertaken wide-ranging efforts to enforce compliance with Ruling Class orthodoxy. With our betters already arguably implementing a budding American social credit system aimed at subjugating and controlling dissenters, why would we expect anything other than for a CBDC to become an integral part of it?

But set aside such perils and questions raised by even Fed governors about the legality of a CBDC, or even its basic utility (one such governor calls CBDCs "a solution in search of a problem"). The public doesn't seem to be clamoring for them. So why are CBDCs so important to the Biden administration, and the Fed?

Are they preparing for a transition to a digital dollar because they're killing the paper one? Remember, America transitioned from a gold standard, which put a check on spending and debt, to a pseudo-gold standard, to, since 1971, a purely paper dollar. This has coincided with fiscal profligacy, aided by monetary mischief, under which our debt has swelled and our dollar has sunk.

Is a currency still further unmoored from anything of intrinsic value, and uniquely manipulable, not the obvious next step for our drunken spenders and monetary manipulators in Washington?

Why would we want to compete with China here? Isn't the right response to alternative currencies—particularly those developed by adversaries in part to break the petrodollar—to make ours the strongest by managing it, and our fiscal house, best?

And why would we think the Fed would manage a digital dollar that it could even more easily debauch better than it does the paper one it's been destroying?

How are the American people to believe a digital dollar would serve as anything other than a tool for surveillance and control?

What might a Woke Ruling Class do to exploit CBDCs to impose its agenda?

The more we manage our lives digitally, the greater the power to surveil, control and abuse.

Combined with the potential economic calamities it might presage, the digital dollar seems like the ultimate recipe for disaster.

Ben Weingarten is a senior fellow at the London Center for Policy Research, fellow at the Claremont Institute and senior contributor to The Federalist. He is the author of American Ingrate: Ilhan Omar and the Progressive-Islamist Takeover of the Democratic Party (Bombardier, 2020). Ben is the founder and CEO of ChangeUp Media LLC, a media consulting and production company. Subscribe to his newsletter at bit.ly/bhwnews, and follow him on Twitter: @bhweingarten.

The views expressed in this article are the writer's own.