Debunking False Claims of Biden Creating a Cashless America
Sep 30, 2022
False and misleading information claiming President Biden has mandated a ‘Cashless America’ is circulating online months after he signed an executive order for assessments of crypto and digital currency. The following debunks these fears, breaking down the actual purpose of the executive order, and gives some examples of pro-cash action and legislation introduced since its publication.
AP News has published a fact check in response to social media posts claiming ‘paper money will become worthless’ and ‘a global cashless society is being rolled out’. It clarifies that Executive Order 14067—Ensuring Responsible Development of Digital Assets—has two purposes: to request that the Federal Reserve explores whether or not the Central Bank should create a digital currency, and direct the Treasury Department and other federal agencies to examine the impact of cryptocurrency on national security and financial stability.
Some posts have highlighted the fourth section of the executive order—which addresses a potential Central Bank Digital Currency (CBDC)—as paving the way for a cashless society. AP assures readers it does not do anything of the sort. It is a directive for the Attorney General to decide whether legislative changes would be required to introduce a CBDC, and for the Federal Reserve and other agencies to study the associated benefits and risks.
It has also been claimed that the executive order has rendered paper money worthless, or is creating a new social credit score system. AP spoke to Aaron Klein, Senior Fellow in Economic Studies at the Brookings Institution, who was clear that this is entirely false.
The executive order did not give the green light to a digital currency. It set in place a structure—a set of studies—and elevated the Attorney General’s role in the process of deciding whether the Fed has existing legal authority or needs new legal authority.
Finally, AP debunks fears that, were a digital currency to be implemented, it would eliminate cash. Eswar Prasad, Economics Professor at Cornell University, explains that the goal of digital currency would be to provide an additional payment choice—operating alongside cash and existing cashless options—that would be ‘more accessible, compared to existing digital payment options’ since it would not need to be linked to a bank account.
If anything, American legislation supports cash, with Miami-Dade becoming the latest area to require physical businesses to accept physical currency, joining states including Arizona, Colorado and Massachusetts, and cities including New York, Philadelphia and San Francisco. Companies are also aiming to broaden their reach and inclusivity, with one example being Lyft adding the option to pay cash across America.