U.S. Representative Warren Davidson, a notable critic of central bank digital currencies (CBDC), recently remarked on the defensive stance of some XRP enthusiasts regarding Ripple’s recent endeavors in the CBDC space.
In a tweet dated August 15th, Davidson expressed his astonishment at the reactions he received from the XRP community on Twitter concerning Ripple’s engagement in CBDCs.
“I was taken aback by how fervently some #XRP enthusiasts on Twitter defended Ripple’s involvement in Central Bank Digital Currency (CBDC).”
Ripple unveiled its novel CBDC strategy on May 18, employing the XRP ledger to empower central banks, governments, and financial entities to launch their digital currencies.
Ripple’s system enables state agencies to oversee and tailor the full life cycle of a CBDC, from its creation, distribution to banks and individuals, to its redemption and eventual destruction. This was highlighted in Ripple’s inaugural CBDC announcement.
Davidson believes that CBDCs present “a profound danger” by transforming money into a means of manipulation and dominance.
In another Tweet, Davidson emphasized the importance of “sound money,” which he describes as both a consistent store of value and an effective medium for transactions.
Davidson was unambiguous about his stance on CBDCs, revealing his intention to draft a law that would outlaw all activities related to them. He stressed that he would tolerate no efforts towards CBDCs, irrespective of the entity behind it, be it Satoshi, Consensys, or even the Federal Reserve.
“To put it in unequivocal terms, I am in the process of drafting legislation that would make it illegal to design, construct, experiment, evolve, or launch a Central Bank Digital Currency.”
Drawing a dramatic analogy, Davidson likened CBDCs to the “financial Death Star,” implying their massive potential impact. He voiced concerns that such digital sovereign currencies could undermine the value and purpose of other digital assets, and expressed frustration over the fact that many people mistakenly equate cryptocurrencies like Bitcoin (BTC) with CBDCs.
Twitter Poll Seeks XRP Holders’ Opinion About Ripple’s CBDC
Davidson reached out to the XRP community for their thoughts on Ripple’s CBDC initiatives through a poll.
The poll’s outcomes indicated a general disinterest regarding Ripple’s endeavors into CBDCs. Over half of those who participated, slightly more than 50%, didn’t express significant enthusiasm about Ripple’s CBDC engagements. About 28% of the respondents appreciated XRP but remained skeptical of CBDCs. A minority, close to 19%, showed support for Ripple’s push into the CBDC domain.
Davidson’s recent remarks have ignited a firestorm among some sections of the XRP and CBDC communities. In response to his statements, one user argued that a CBDC is merely a “technological instrument,” suggesting its potential benefits in areas like welfare and unemployment support.
Another individual, presumably an XRP enthusiast, questioned, “Why single out Ripple?” especially when the U.S. government itself is exploring the potential of launching a CBDC.
Davidson, who serves Ohio’s 8th Congressional District, has been a consistent critic of CBDCs. He previously called on the government to immediately halt and outlaw all endeavors related to CBDCs. In March, he took a formal step, penning a letter to his peers, rallying them to resist the advancement of CBDCs.
However, Davidson isn’t the lone voice in Congress opposing a ‘digital dollar.’ Republican Tom Emmer has similarly expressed concerns about a state-backed digital currency, branding it a tool for surveillance that could infringe upon the privacy of American citizens. Emmer has gone further by tabling legislation aimed at preventing the Federal Reserve from rolling out a CBDC in the United States.