Stark Slams CBDC Creation
In a fiery Twitter tirade, former SEC official John Reed Stark didn’t hold back his criticism of cryptocurrencies, stablecoins, and CBDCs. Stark, now the president of cybersecurity firm John Reed Stark Consulting, called the creation of a CBDC the “most absurd financial idea in the history of monetary policy.”
The Bad News:
- Stark questions the necessity of a CBDC and argues that there are already regulated digital currencies that work well.
- He criticizes politicians who support crypto without understanding its externalities and lack of innovation.
- Stark warns about the risks a CBDC poses to financial sector market structure, credit availability, and the safety of the financial system.
- He agrees with Professor Hilary Allen that a CBDC would create unnecessary risks and privacy concerns.
- Stark supports Senator Ted Cruz’s bill to prohibit the Federal Reserve from developing a CBDC.
The Good News:
- Lawmakers like Tom Emmer and Alex Mooney have introduced bills to halt the development of CBDCs and protect financial privacy.
- Florida Governor Ron DeSantis has already signed legislation banning the use of a CBDC in his state.
Hot Take:
Stark’s scathing critique raises important questions about the necessity and risks of CBDCs. While some politicians champion crypto as innovative, Stark argues that regulated digital currencies already exist and offer trust and oversight. The potential risks to financial stability and privacy should give policymakers pause before moving forward with a CBDC.
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