As cryptocurrencies have proliferated in the private sector, central banks are now contemplating getting into the game. Venezuela tried unsuccessfully to popularize its currency with the digital petro. China may be more successful with its plan to digitize the yuan.
Now, some are saying the U.S. Federal Reserve should issue its own cryptocurrency, with names like “Fedcoin” and the “digital dollar.” Most proposals for this national cryptocurrency also include direct consumer deposit accounts with the Fed.
Proponents give various reasons why the Fed should issue digital currency, from protecting the dollar competition with China to relieving the poor from high bank fees. But opponents cite multiple problems such a system would have from privacy concerns with the Fed having direct access to consumer spending data, to enabling currency manipulation, to crowding out innovation from private cryptocurrencies and payment systems.
August 18, 2020 at 1:00 PM ET
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Competitive Enterprise Institute
J. Christopher Giancarlo
Willkie Farr & Gallagher LLP
Director, Center for Data Analysis
The Heritage Foundation