The goal of digital currency wouldn’t be to eliminate cash, according to Prasad. “It set in place a structure, it set in place a set of studies, and it elevated the attorney general’s role in the process of deciding whether the Fed has existing legal authority or needs new legal authority.” “The executive order did not give the green light to a digital currency, to a CBDC,” Klein said in a phone interview. This claim and other claims that the executive order renders paper money worthless or implements a new social credit score system are false, according to Aaron Klein, a senior fellow in economic studies at the Brookings Institution. “It is a legitimate concern that, given the traceability of digital transactions, a central bank digital currency could result in the loss of privacy in financial transactions relative to the use of cash,” said Prasad, who is also the author of the book The Future of Money. However, with this executive order the U.S is weighing its options and paying attention to concerns of potential loss of privacy. Prasad explains that other countries such as China, Japan and Sweden have already begun tests of digital currencies at their own central banks. “At this stage, the Fed is just introducing the subject into the public debate and is weighing the options,” said Eswar Prasad, an economics professor at Cornell University. Many proponents of digital currencies, more often called cryptocurrencies, prefer a system where the currency is not controlled by any government. It directs the Federal Reserve and other agencies to study the risks and benefits of that approach and charges the Attorney General with deciding whether legislative changes would be necessary to implement such a change.

However, the executive order does not create such a system. Some of the online posts directed readers to the fourth section of the executive order, which focuses on policy and action related to a potential central bank digital currency, or CBDC. “ A global ‘CASHLESS SOCIETY’ is being rolled out, possibly in December 2022,” another post claimed. “Your paper money will become worthless, it’s going to be replaced with Biden bucks,” read one widely shared Facebook post, which added that “programmable digital tokens” would be able to “turn off your account whenever they want” using a social credit score system. The long-anticipated executive order called on government agencies to look at the risks and benefits of digital currencies.įive months later, social media users are spreading unsupported theories about what the order will do. THE FACTS: In March, Biden signed Executive Order 14067, titled Ensuring Responsible Development of Digital Assets. It urged the Federal Reserve to explore whether the central bank should create its own digital currency and directed the Treasury Department and other federal agencies to study the impact of cryptocurrency on financial stability and national security. The executive order doesn’t do any of these things. It does not store any personal data.CLAIM: President Joe Biden signed an executive order in March 2022 that will introduce a cashless society, make paper money worthless, give the government new power to inhibit purchases and create a social credit score system like the one in China, which would punish people financially for certain behaviors.ĪP’S ASSESSMENT: False. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. The cookie is used to store the user consent for the cookies in the category 'Performance'. This cookie is set by GDPR Cookie Consent plugin.

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