A central bank digital currency, or CBDC, was once an idea confined to water cooler conversations among economists. But last week, former President Donald Trump catapulted the CBDC controversy to the front of the campaign trail. At an event on Jan. 18, he promised supporters, “As your president, I will never allow the creation of a central bank digital currency. This would be a dangerous threat to freedom, and I will stop it from coming to America.” The crowd roared.
So what is a CBDC? Why is Trump suddenly talking about it? And what does a digital dollar have to do with Bitcoin and the future of money?
In short, a CBDC is a digital dollar created by the federal government. This may sound benign at first. But effectively giving the government digital control over consumer bank accounts has profound implications for privacy and freedom.
Both the virtue and the vice of a CBDC is that it is a form of programmable money. The programmability of a CBDC could empower governments to micro-target stimulus packages and transmit money more efficiently. But it could also enable governments to manipulate how and where we spend our money, going so far as to turn it on and off.
Nowhere is the threat of a government-controlled digital currency more evident than in China, which was the first major economic power to launch a CBDC. China is currently exploring ways to exploit the “programmable features” of its CBDC, which will empower CCP bureaucrats to put an expiration date on money, restrict spending to certain sectors, and even tie it to a citizen’s social credit score.
In China, a CBDC will enable the kind of central planning Karl Marx could have only dreamed of. It’s no wonder then that Democrats and Republicans alike despise the idea. Having seen the social experiment going on in China, many have a legitimate fear that a CBDC would allow the federal government to control their money and track their spending. That’s why nearly 75% of Americans are opposed to a government-backed digital dollar where such tracking would be possible, according to a recent survey from Cato.
Trump appears to have intuited that a CBDC is the undiscovered third rail of American politics. And so, he is railing against it in hopes of galvanizing liberty-minded Republicans in the primary with an eye toward privacy-minded Democrats and independents in the general. With this strategy, Trump aims to contrast himself with President Joe Biden, who signed an executive order in March 2022 to place “urgency on research and development of a potential United States CBDC.” Biden has failed to recognize just how controversial a CBDC would be with his own supporters—a mistake Trump is keen to exploit.
By opposing a CBDC, Trump aims to tap into a new well of support, particularly among experienced voters weary of government overreach. But beneath that well is an even larger reservoir of political energy just waiting to be unleashed: the younger and more diverse Bitcoin vote.
For many, waking up to the dangers of a CBDC is the first step in embracing Bitcoin. That’s because Bitcoin is anti-CBDC technology. While a CBDC is a form of programmable money that governments can manipulate, Bitcoin is a decentralized currency that no one controls—one resistant to both central bank manipulation and government censorship.
So what does this all mean for the 2024 campaign? To shore up his anti-CBDC bona fides, the next logical step for Trump could be to embrace Bitcoin. This would not only cement his support among pro-privacy Americans, it would curry favor with the crypto vote, which is positioned to be one of the most consequential constituencies this November.
In 2020, the digital asset voter was all but non-existent. Bitcoin was just starting a historic bull run. Many Americans did not understand it yet, thought it was a “scam,” or had concerns regarding its relationship with the U.S. dollar.
Fast-forward to today: An eye-popping 52 million Americans own digital assets, including 18% of Republicans and 22% of Democrats. Coinbase reports that the population of owners is greater than the number of Americans who directly own stock or use rideshares each month. The owners tend to be younger and span ethnic and political demographics.
In light of this bourgeoning population, multiple presidential primary candidates have outlined policy agendas to protect the right to own Bitcoin and cryptocurrencies. And premier financial institutions like BlackRock and Fidelity have just launched the first spot Bitcoin ETFs.
In sum, digital asset enthusiasts have become a political force to be reckoned with.
Just last month, an alliance of industry-aligned super PACs announced that they had collectively raised $78 million. They aim to increase that total to $100 million this quarter to support pro-innovation candidates. On a grassroots level, voters who own digital assets are poised to play a powerful role as well, especially in key battleground states.
Consider New Hampshire, Nevada, Ohio, and Pennsylvania. According to a Morning Consult poll, 18% of voters across these four states own digital assets. And of these voters, 55% said they would be less likely to support a candidate who stands in the way of crypto values. Those values include a desire to build an ownership economy, coupled with a distrust of the current economic system run by government agencies and large financial institutions.
In other words, these issues are top priorities for up to 1.9 million voters across these four swing states alone. In states that were decided by just thousands of votes in 2020, this new coalition of digital asset diehards could be enough to swing the election.
The question is, does Trump care?
While he’s been critical of digital assets in the past, there is growing evidence that he is changing his tune. Before raising the alarm on the dangers of CBDCs, Trump dipped his toes into crypto by raising millions of dollars through the launch of his own NFT collection.
Trump has already embraced crypto to gin up support among voters—and he could do so again by espousing a pro-Bitcoin agenda. In so doing, he could win converts among a voting group that the Biden administration has been openly hostile to. And he could gain instant access to millions of new voters and tens of millions of dollars in financial backing from heavyweight Super PACs.
Herein lies the beauty of embracing Bitcoin: As a financial investment, it has historically been viewed as high-risk, high-reward. As a political gambit, however, it is low-risk, high-reward. Much like opposing a CBDC, supporting the right to own Bitcoin and crypto is a dealmaker for millions of Americans and a dealbreaker for almost none. And if anyone can recognize a good deal, it’s Donald Trump.
Brian Morgenstern is head of public policy at Riot Platforms, Inc., one of the largest publicly traded Bitcoin mining enterprises in North America. He was a senior advisor and deputy assistant secretary of the Treasury from 2017 to 2020 and from 2020 to 2021 served as White House deputy press secretary and deputy communications director in the Trump administration. The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.