In a fi­nan­cial era de­fined by dig­i­tal in­no­va­tion, the Trump ad­min­is­tra­tion’s out­right re­jec­tion of a US Cen­tral Bank Dig­i­tal Cur­ren­cy (CB­DC) has sparked fierce de­bate.

Pres­i­dent Don­ald Trump’s Ex­ec­u­tive Or­der on Jan­u­ary 23, 2025, ti­tled Strength­en­ing Amer­i­can Lead­er­ship in Dig­i­tal Fi­nan­cial Tech­nol­o­gy, banned the “es­tab­lish­ment, is­suance, cir­cu­la­tion, and use” of a Cen­tral Bank Dig­i­tal Cur­ren­cy (CB­DC) with­in the Unit­ed States. Was this a mas­ter stroke fos­ter­ing pri­vate in­no­va­tion and US lead­er­ship in dig­i­tal fi­nance or a strate­gic blun­der that could cost the US its fi­nan­cial dom­i­nance?

CB­D­Cs, at their core, promise a range of ben­e­fits, in­clud­ing en­hanced fi­nan­cial in­clu­sion, more ef­fi­cient trans­ac­tions, and greater mon­e­tary pol­i­cy con­trol.

The Trump ad­min­is­tra­tion has re­ject­ed em­brac­ing a state-backed dig­i­tal cur­ren­cy and has in­stead dou­bled down on strength­en­ing the pri­vate bank­ing sec­tor and pro­mot­ing sta­ble­coins as an al­ter­na­tive. Sta­ble­coins, which are dig­i­tal as­sets pegged to the dol­lar but is­sued by pri­vate en­ti­ties, are viewed by some as a mar­ket-friend­ly al­ter­na­tive to a Fed­er­al Re­serve-con­trolled dig­i­tal cur­ren­cy.

The log­ic? Keep fi­nan­cial pow­er de­cen­tralised, min­imise gov­ern­ment in­ter­ven­tion, and al­low pri­vate in­no­va­tion to flour­ish. How­ev­er, crit­ics ar­gue that this ap­proach could leave the US play­ing catch-up as glob­al fi­nan­cial sys­tems evolve.

The Trump ad­min­is­tra­tion’s aver­sion to CB­D­Cs ap­pears deeply root­ed in ide­o­log­i­cal con­cerns over pri­va­cy and gov­ern­ment over­reach. A US CB­DC would mean trans­ac­tions mon­i­tored by the Fed­er­al Re­serve, po­ten­tial­ly paving the way for in­creased gov­ern­ment sur­veil­lance—a sce­nario lib­er­tar­i­ans and con­ser­v­a­tives view as dystopi­an.

Trump’s re­jec­tion of a CB­DC was mar­ket­ed as a win for in­di­vid­ual free­dom: no gov­ern­ment track­ing your spend­ing, no Fed act­ing as both ref­er­ee and play­er in the fi­nan­cial sys­tem. It was a na­tion­al­ist, lib­er­tar­i­an dream rolled in­to one. But was it al­so a strate­gic mis­cal­cu­la­tion?

While Wash­ing­ton opts out of CB­D­Cs, the rest of the world is ac­cel­er­at­ing. Chi­na’s dig­i­tal yuan is al­ready re­shap­ing glob­al trade, the Eu­ro­pean Union is lay­ing the ground­work for a dig­i­tal eu­ro, and small­er economies are ex­per­i­ment­ing with their CB­D­Cs to re­duce re­liance on the US dol­lar. Imag­ine a world where Africa em­braces the dig­i­tal yuan for trade, Eu­rope ce­ments a dig­i­tal eu­ro-led eco­nom­ic bloc, and Latin Amer­i­ca piv­ots to­ward blockchain-based fi­nan­cial set­tle­ments.

If the US stands still, does it risk los­ing its eco­nom­ic in­flu­ence to a frag­ment­ed, in­creas­ing­ly mul­ti­po­lar fi­nan­cial or­der? Some see this as eco­nom­ic de­cen­tral­i­sa­tion, an over­due shake-up of a dol­lar-dom­i­nat­ed world. Oth­ers see chaos—a fi­nan­cial Wild West where com­pet­ing dig­i­tal cur­ren­cies un­der­mine sta­bil­i­ty. Ei­ther way, the stakes couldn’t be high­er: the fu­ture of mon­ey it­self hangs in the bal­ance.

By re­ject­ing a gov­ern­ment-con­trolled dig­i­tal cur­ren­cy, Trump has bet on Amer­i­ca’s pri­vate sec­tor to main­tain its fi­nan­cial edge. Sta­ble­coins, fin­tech dis­rup­tors, and de­cen­tralised fi­nance are ex­pect­ed to keep the US com­pet­i­tive. But will that be enough? While Sil­i­con Val­ley tin­kers with blockchain break­throughs, Chi­na is forg­ing trade al­liances, Rus­sia is re­in­forc­ing al­ter­na­tives, and Eu­rope is set­ting reg­u­la­to­ry frame­works.

The dol­lar re­mains the undis­put­ed king of glob­al fi­nance—for now. The com­ing decade will de­cide whether the US re­mains the world’s fi­nan­cial su­per­pow­er or be­comes one ma­jor play­er in a dig­i­tal, de­cen­tralised fi­nan­cial or­der. The de­bate over CB­D­Cs is far from set­tled, but it un­der­scores the need for thought­ful, col­lab­o­ra­tive pol­i­cy-mak­ing as the fi­nan­cial world tran­si­tions in­to a dig­i­tal fu­ture.

Prof C Justin Robin­son

Pro­fes­sor of Cor­po­rate Fi­nance

Pro-Vice Chan­cel­lor and Prin­ci­pal, UWI, Five Is­lands Cam­pus