As the world moves further into the digital age, financial innovations are emerging in the digital currency space that are taking up much of the public discourse: Central Bank Digital Currencies (CBDCs) and cryptocurrencies.
While both operate digitally, the key distinction lies in who controls them and what that means for personal financial autonomy.
For those of us working to understand this new era of digital currency, it can be easy to confuse CBDC with crypto. On January 23, 2025, President Trump issued an executive order entitled “Strengthening American Leadership in Digital Financial Technology.” In this order, he set out “five high-level policy objectives:
- Protecting the lawful use of blockchain networks, participation in mining and validation, and self-custody of digital assets without unlawful censorship;
- Promoting dollar-backed stablecoins;
- Ensuring fair and open access to banking services;
- Providing “regulatory clarity” for digital assets based on “well-defined jurisdictional regulatory boundaries;” and
- Prohibiting Central Bank Digital Currencies (“CBDC”).”
See "Trump's Executive Order Promotes Digital Financial Technology The order specifically prohibits CBDC while protecting and promoting the expanded use of crypto. So, what’s the difference?
CBDCs vs. Cryptocurrencies: Who Controls Your Money?
CBDCs are government-backed digital currencies issued by central banks, while cryptocurrencies operate on decentralized networks. Supporters of CBDCs argue they improve efficiency and security, while critics warn they could lead to increased government control over individual financial freedom. On the other hand, cryptocurrencies offer a free-market alternative, though they come with their own risks and volatility.
Ultimately, the decision of whether to embrace or reject either system should be left to the individual investor—not dictated by the state
Central Bank Digital Currencies (CBDCs): A Tool for Control?
CBDCs are digital versions of national fiat currencies, fully controlled and issued by central banks. Unlike cash, which allows for private transactions, CBDCs are entirely digital, meaning every transaction can be tracked, recorded, and potentially restricted.
Potential Concerns with CBDCs
While central banks argue that CBDCs can reduce fraud and improve efficiency, they also introduce unprecedented government oversight into personal finances. Some concerns include:
- Loss of Financial Privacy – Every transaction would be logged in a centralized ledger, allowing governments to monitor spending habits.
- Potential for Restrictions – Governments could impose spending limits, restrict certain purchases, or even freeze accounts based on policy decisions.
- Monetary Policy Manipulation – CBDCs could allow central banks to implement negative interest rates directly on personal accounts, discouraging savings.
- Elimination of Cash – If physical cash is phased out, individuals would lose a key financial tool that allows for private, untracked transactions.
- Potential for Political or Social Control – Some fear CBDCs could be used to enforce compliance with government mandates by controlling access to funds.
The extent to which these risks materialize depends on how governments choose to implement CBDCs. However, the fact remains that centralization gives the state power over financial transactions in ways that were previously impossible.
Old Glory Bank has always taken the position that CBDCs are not likely to be implemented in the United States of America as the Federal Reserve cannot designate digital currency as "legal tender" under Section 31 U.S.C. 5103. Digital Dollars would be outside what Congress intended when it enacted this statute, especially considering the history of this statute back to 1884. Fortunately, the current chairman of the Federal Reserve also shares our view and already acknowledged on March 20, 2021, that the Federal Reserve could not issue digital currency without Congress enacting legislation. See WSJ, 3/22/21. In this regard, we do not believe that a Republican House or the Senate will support this legislation. Of course, this position was even before President Trump’s express Executive Order prohibiting CBDC which further makes it apparent that a CBDC is neither likely nor possible in the United States.
Cryptocurrency: A Free-Market Alternative?
Conversely, cryptocurrencies, such as Bitcoin and Ethereum, operate on decentralized blockchain networks, meaning no central authority has control over them. Transactions are recorded on distributed ledgers, making them more resistant to censorship or direct state intervention.
Key Features of Crypto
- Decentralization – Unlike CBDCs, crypto is not controlled by any government or institution.
- Limited Supply – Many cryptocurrencies have built-in scarcity (e.g., Bitcoin's 21 million cap), which contrasts with fiat currencies subject to inflation.
- Permissionless Transactions – Crypto can be transacted globally without the need for traditional financial intermediaries.
- Privacy Options – While not all cryptocurrencies are anonymous, some offer more privacy than traditional banking systems.
Considerations for Investors
Despite its potential as an alternative to government-controlled money, cryptocurrency is not without risks:
- Price Volatility – Cryptos can experience dramatic price swings, making them a speculative asset.
- Regulatory Uncertainty – Governments may introduce regulations that affect crypto’s accessibility and legality.
- Security Risks – Investors must safeguard their assets from hacking, fraud, and scams.
Unlike CBDCs, crypto is not inherently good or bad—it is simply an asset class. Whether or not to invest in it is a personal decision based on risk tolerance, financial goals, and belief in decentralized finance.
CBDCs vs. Crypto: Who Should Decide?
The key issue at stake is choice. Should individuals have control over how they store and use their wealth, or should governments dictate the structure of the financial system?
- CBDCs offer efficiency but come with the risk of financial surveillance and government overreach.
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- Crypto offers an alternative outside government control but carries risks that investors must assess for themselves.
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This week, Federal Reserve Chairman Jerome Powell announced that “banks are perfectly able to serve crypto clients” leading to a soar in prices for cryptocurrencies. Old Glory Bank takes the position that, ultimately, financial autonomy should remain in the hands of individuals, not centralized authorities. Governments should not force CBDCs as the only option, just as individuals should have the right to assess and invest in crypto—or avoid it—based on their own personal financial strategy ensuring that individuals retain the freedom to choose how they engage with digital finance. At Old Glory Bank, we are in the midst of a mini-IPO offering and are accepting crypto.
Whether one supports crypto or is skeptical of it, the ability to choose between different financial systems is a fundamental aspect of personal liberty.
Instead of imposing a single monetary system, the government should focus on protecting financial freedom and allowing individuals to determine what works best for them. In the end, the best financial system is one where choice, competition, and individual sovereignty remain intact.
