A report from the Cato Institute argues that a United States government-issued central bank digital currency, or CBDC, would usurp the private sector and threaten citizens’ privacy and core freedoms.
The U.S. government is investigating the creation of a CBDC — essentially a digital dollar that would be backed by the Federal Reserve. According to analysis from the Cato Institute, a Washington, D.C.-based policy research think tank, this represents a clear and present danger to citizen privacy and the free market.
The institute minced no words in the phrasing of the report’s ultimate takeaway, stating that CBDCs “should have no place in the American economy” and that “Congress should explicitly prohibit the Federal Reserve and the Department of the Treasury from issuing a CBDC in any form.”
New: @EconWithNick explodes myths of central bank digital currencies (CBDCs) and exposes the key risks. https://t.co/7lqW18UhG4 @CatoCMFA
— Cato Daily Podcast (@CatoPodcast) April 4, 2023
Primary arguments against the development of a government-issued CBDC, according to the Cato Institute, include fears over tracking and control, destabilization of the free market, and cybersecurity.
“The private sector is not immune either, but it does have the distinct advantage of being more decentralized than the federal government,” writes the authors of the report, which continues, “Whereas an IRS breach puts all 333 million Americans at risk, a breach at a private financial institution would affect only a fraction of citizens.”
These privacy concerns could extend beyond the United States as some 60% of global financial liabilities and claims are denominated in U.S. dollars, according to the Federal Reserve.
Related: CBDCs could be ‘easily weaponized’ to spy on US citizens: Congressman
It’s unclear at this time if and when the U.S. intends to issue a CBDC — although the Federal Reserve’s FedNow service, a state-operated instant transaction banking portal, is scheduled to go online this July.
Per a previous report from Cointelegraph’s Brayden Lindrea, the ongoing discussions on Capitol Hill remain a hot-button issue for some, with Congressman and GOP majority whip Tom Emmer calling CBDCs potentially “dangerous” for both individual users and the government’s political opponents.
Hits: 0
