Preserving Utah’s digital sovereignty: The threat of Central Bank Digital Currency

By Tyler Clancy and Mike Kennedy – | Dec 21, 2023

Courtesy photo
Utah Rep. Tyler Clancy, R-Provo.

As Utah state legislators committed to safeguarding the liberties and privacy of our constituents, we are deeply concerned about the encroachment on Utahns’ digital sovereignty posed by the introduction of a federally controlled “Central Bank Digital Currency.” CBDCs present substantial dangers to the fundamental rights and autonomy of all Utahns.

A CBDC is a “form of digital currency issued [and controlled] by a country’s central bank.” While similar to other forms of digital currency such as Bitcoin, a CBDC is controlled directly by a government or multinational corporation and is valued equal to the country’s fiat currency. Proponents of CBDC point to convenience and simplicity as reasons to make the switch from physical dollars.

Earlier this year in April, the Biden administration proposed a digital currency called “FedNow.” Biden lauded the project, stating that “A potential U.S. CBDC could help preserve U.S. global financial leadership, and support the effectiveness of sanctions.” Unfortunately, this move would shift unprecedented power directly into the hands of the federal government, giving them the ability to monitor every aspect of consumer activity and the control to exercise an “on, off switch” over individual market choices. This level of control represents a dangerous precedent of government overreach that directly threatens our financial sovereignty. Simply put, if the government controls your bank account, it controls every aspect of your life.

One of the most significant concerns surrounding a federally controlled CBDC is its potential to undermine the independence of critical institutions that play a crucial role in our local economies. The state of Florida’s chief financial officer, Jimmy Patronis, rightly pointed out that a CBDC would lead to individuals having “their vital financial information surveilled and controlled by the federal government.” This shift in the financial landscape poses a serious threat to the economic dynamism that our state relies on.

In response to this looming threat, we are proposing legislation that takes a firm stance against recognizing a CBDC as money, legal tender or currency in Utah. This legislation is driven by the need for clear and significant protection against the encroachment of a federally controlled digital currency. Simple language is being incorporated to ensure the legislative intent is unmistakable. A CBDC that is directly controlled by the federal government not only jeopardizes the core principles the Fourth Amendment was crafted by but sets a dangerous precedent that could erode the very foundations of the freedom we hold dear.

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Utah Sen. Mike Kennedy, R-Alpine.

As state legislators, it is our duty to be vigilant against any form of government overreach that threatens the rights and freedoms of our citizens. We invite our fellow lawmakers and constituents to join us in this critical endeavor to maintain the values that make Utah strong, safe and resilient.

Rep. Tyler Clancy is a Republican from Provo. Sen. Mike Kennedy is a Republican from Alpine.

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