Trump Puts An End To CBDCs In The United States: What Does The Future Hold For These State Currencies?

The prohibition of central bank digital currencies (CBDCs or MNBCs) in the United States by Donald Trump disrupts the global dynamics of state digital currency projects. This historic decision raises questions about the future of CBDCs, particularly in Europe where the ECB is maintaining its course towards the digital euro.

A shockwave in the landscape of global CBDCs

Yesterday, January 23rd in Washington, U.S. President Donald Trump signed a decree prohibiting the development and use of central bank digital currencies (CBDCs) in the United States. This decision, widely welcomed by the crypto community, comes at a time when many countries are actively exploring these state digital currencies.

CBDCs are divided into two main types: retail CBDCs, intended for the general public, and wholesale CBDCs, used for interbank transactions. They aim to modernize payment systems and promote financial inclusion. However, this prohibition could slow progress in retail CBDCs, which are often criticized for their potential for increased centralization and surveillance.

Yifan He, founder of Red Date Technology and an expert on CBDCs, estimates that this measure will have a significant impact on “any retail CBDC project over the next four years.” However, he reminds that technical challenges make it unlikely that a true retail CBDC will be launched in the next decade.

“But the fact is that I don’t think any country can develop a true retail CBDC in the next 10 years,” he declared to our colleagues at Cointelegraph.

Finally, the position of the United States may encourage some countries to accelerate their own initiatives, particularly in the area of wholesale CBDCs, which are considered more relevant for interbank transactions.

Europe stays the course on the digital euro

Despite the withdrawal of the United States, the European Union remains firmly committed to developing its own CBDC. Christine Lagarde, President of the ECB, recently emphasized the strategic importance of the digital euro to enhance Europe’s financial autonomy and security. This initiative aims to reduce reliance on financial systems dominated by the United States.

Tomer Warschauer Nuni, from Kima Network, believes that this European commitment could intensify, with the ECB seeking to “establish strategic autonomy in payments and limit reliance on non-European infrastructures.”

This approach is also being adopted by countries like China, Israel, and Australia, which are actively pursuing their CBDC projects.

The development of CBDCs is thus becoming a major geopolitical issue, opposing different visions of the monetary future. While the American prohibition marks a turning point, it could paradoxically stimulate the efforts of other regions of the world determined to assert their monetary sovereignty.