DIGITAL MONEY: TRUMP’S 21ST CENTURY EXECUTIVE ORDER

25 Jan

Money is Changing. Its transformation is not merely technical but profoundly political, social, and ethical. President Trump’s recent executive order in the U.S., which prohibits the creation and circulation of Central Bank Digital Currencies (CBDCs), demonstrates strong opposition to the centralization of digital money.

Digital decentralization can restore the original role of primordial money. It once enabled the expression of a plurality of values involved in humanity’s ancestral transactions, carried out within tribes and small groups where everyone knew each other. Similarly, new decentralized digital currencies (cryptocurrencies) can be programmed to reflect the diversity of interests and needs of communities, giving people back the ability to account for value in a multidimensional way—this time on a global scale.

Conversely, when the new digital power of money is centralized, it can transform our primary economic incentive system into an instrument of surveillance, manipulation, and control, limiting individual freedom and conditioning citizens’ behavior according to hegemonic or authoritarian interests, as already seen in China with the “Digital Yuan” CBDC.

With blockchain technology and artificial intelligence (AI), it is possible to decentralize digital currencies, allowing for their free programming and transaction by the needs and principles of the communities that adopt them, aiming to promote a freer and fairer society. Understanding the current transition to digital systems that are as innovative as they are disruptive is crucial. Deciphering the strategic motivations behind Trump’s executive order, which aims to increase competitiveness, is essential. To understand its justification, we must analyze the origins and nature of money.

If Europe underestimates the role of digital decentralization in fostering innovation in this new era of exponential technology, it may fall quickly and irreversibly behind the U.S.

1. Money: A Database.

Money emerged long before the invention of coins, serving as a repository or mental record of information about human transactions. This shared memory enabled exchanges with high transparency and social accountability within small groups. However, this ethical transparency was lost as societies grew, giving way to complex, centralized, and opaque financial systems.

Today, the money we use—whether physical or digital—has lost its ability to record and reflect human transactions’ social and community impacts. Whether in cash or bank transfers, the current monetary database is insufficient for a moral evaluation of exchanges carried out through it. In other words, money has become ethically reductive, limiting all the value it conveys to a strictly financial dimension.

The good news is that the inherent transparency of decentralized blockchain networks (permissionless) and the adoption of explainable AI (XAI) systems make it possible to recover the collective memory of primordial money, once limited to the tribal sphere, and expand it to a global scale thanks to digital power.

2. Pathways to the Future of Money

A – Decentralized Digital Money: Cryptocurrency

Blockchain-based cryptocurrencies are a product of the free market. However, their transparency and traceability make the “invisible hand” of the market visible and measurable, allowing money to incorporate human values previously overlooked by capitalism. In this way, they can simultaneously protect individual autonomy and social causes, enabling communities to create currencies tailored to their expectations and needs, thereby promoting ethical and fair practices. With this presidential executive order, any law-abiding American citizen or legitimate organization in the United States has the right to create digital money without legal barriers.

B – Centralized Digital Money: CBDC

Central Bank Digital Currencies (CBDCs) are a product of central planning. While they have enormous potential for efficiency—perhaps even more significant than cryptocurrencies—they compromise privacy and freedom, making citizen surveillance and control much easier. President Trump’s recent executive order eliminates this concern at its root, positioning itself against CBDCs as they threaten individual autonomy.

Economic consequences will exist if Europe continues developing its CBDC (the ECB is currently studying the Digital Euro). Its non-acceptance in the U.S. could devalue the European digital currency in global trade, reducing the euro’s attractiveness as a store of value and driving investments away, leading to a competitive disadvantage compared to decentralized alternatives.

3. Ethical and Competitive Money.

While political resistance to CBDCs gains ground, cryptocurrencies supported by this executive order fill the gap left by a financial system that struggles to meet the new demands for transparency and efficiency in the digital age.

4. Surveillance and Control: An Imminent Reality?

The implementation of central bank digital currencies (CBDCs) represents a significant increase in the government’s ability to monitor and control citizens’ lives. Under the pretext of efficiency and security, these currencies can be used to track every single transaction and influence behavior through programmable monetary policies at the granular level of each individual’s digital wallet, conditioning their access to financial resources based on political or social criteria, similar to the social credit and ranking system already in place in China.

This potential for unprecedented financial oversight raises ethical and individual sovereignty concerns. The centralization of financial data can legitimately ensure security and prevent crime. Still, it can also be exploited abusively, leading to excessive fiscal scrutiny, arbitrary restrictions on individual spending, and automatic sanctions applied to any citizen’s digital wallet, compromising privacy, freedom, and personal autonomy.

5. Defining Moments.

The U.S. decision to ban domestic CBDCs and block foreign ones demonstrates that the future of digital money is not solely in the hands of governments but also of companies and civil society. Europe now faces the extraordinary challenge of balancing technological innovation with regulation, avoiding becoming synonymous with control and striving to stand for freedom and progress.

The monetary evolution of the digital age is already underway. Let us choose the right path forward.

Dario Rodrigues