The claim: a cashless digital currency will arrive in December
On March 9, President Joe Biden signed an executive order to promote the development of digital assets and cryptocurrencies. But some social media users misinterpret some aspects of the directive.
An Aug. 15 article from News Punch, a website that previously posted misinformation, shared on Facebook claims that Biden “is set to launch a cashless system this December via a newly formed central bank digital currency.”
A central bank digital currency is “virtual money guaranteed and issued by a central bank,” according to the Atlantic Council, a think tank focused on economic and political change.
The article states that this action will take place through Biden’s Executive Order 14067, which will give elites the power to distribute this currency “at will, steal it whenever they want and shut it down if you do something they don’t approve.”
The article was shared on Facebook more than 500 times in one month.
But the claim is unfounded.
The executive order does nothing to eliminate the use of cash. And economists say the order simply asks federal agencies to assess the viability of such a central bank digital currency, neither authorizing nor implementing it.
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USA TODAY has reached out to social media users who have shared the request for comment.
Biden’s executive order will not implement a cashless digital currency
Biden’s executive order does not authorize the creation of a central bank digital currency in December or otherwise, John Rizzo, a spokesman for the Treasury Department, told USA TODAY in an email.
It simply asks the Federal Reserve and other agencies to assess the technical feasibility as well as the potential pros and cons of a digital dollar, according to Eswar Prasad, a senior professor of trade policy at Cornell University.
For example, the order says officials should consider to what extent the digital currency would “improve or hinder monetary policy” or whether legislative changes are needed to implement such a currency if deemed appropriate.
“At this stage, the Fed is introducing the subject into public debate and evaluating options, with particular attention to how to balance concerns about the potential loss of privacy with the need to ensure that the digital currency is not used for illicit transactions.” , Prasad said.
Verification of the facts:False claims PNC Bank positions will have no coins starting in October
Experts said they were unclear who the “elites” were referred to in the article.
In any case, if a central bank digital currency were created, it would be subject to all the guardrails – and probably many others – that currently exist with commercial banks and the government, Josh Lipsky, senior director of the GeoEconomics Center at the Atlantic Council, he told USA TODAY in an email.
Prasad said that as long as the Federal Reserve maintains its independence, politicians would have no direct role in the creation or distribution of physical or digital currency.
Verification of the facts: A cashless society is not forthcoming and it would not mean the total end of cash
And that currency wouldn’t even lead to a “cashless system”.
“Digital dollars would not aim to replace cash, but would serve as an alternative payment option that would be affordable and easily accessible to anyone, even those without bank accounts or credit cards,” Prasad said.
Currently, 105 countries are exploring a central bank digital currency, according to the Atlantic Council. Of that group, 11 countries have launched the currency and 14 countries are in the pilot phase.
Our rating: False
Based on our research, we evaluate FALSE the claim that a cashless digital currency will arrive in December. The Treasury Department told USA TODAY that the currency will not be launched in December. The Federal Reserve and other agencies are simply evaluating the viability of a central bank digital currency through Biden’s executive order.
Our sources of fact-checking:
- John Rizzo, August 26, Email exchange with USA TODAY
- David Yermack, September 2, Email exchange with USA TODAY
- Eswar Prasad, August 27, email exchange with USA TODAY
- Aaron Klein, September 2, Email exchange with USA TODAY
- Josh Lipsky, September 2, Telephone interview with USA TODAY
- Associated Press, August 24, executive order does not inaugurate cashless society
- The American Presidency Project, March 9, Executive Order 14067 – Ensuring Responsible Development of Digital Assets
- USA TODAY, Feb. 18, Fact Check: Misleading Posts on Moderna CEO’s Twitter Account, Stock Selling
- WCNC, Sept. 2, No, Biden’s executive order will not replace paper money with digital currency
- Federal Register, accessed September 15, Ensuring Responsible Development of Digital Assets
- USA TODAY, July 27, 2020, Fact Check: A cashless society is not forthcoming and it would not mean the total end of cash
- The Atlantic Council accessed the Central Bank Digital Currency (CBDC) Tracker on September 16
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