The Fed’s Dismal Digital-Dollar Idea

This grievous mistake could stifle financial innovation.

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Alexander William Salter is spot on when he warns of the “Dangers of a Digital Dollar” (op-ed, Oct. 6) to financial privacy and political dissent. Another reason to be skeptical of a government-backed digital currency is that the benefits acknowledged by Mr. Salter, such as faster payments and financial inclusion, are already being achieved by private-sector innovators.

Fintech apps such as Dave and Chime offer consumers low-fee banking and free or very low-cost advances on their paychecks. Privately issued “stablecoins” move money quickly between cryptocurrencies and state-backed national currencies. A central-bank digital currency would be duplicative of these innovations and could crowd them out.

Policy makers should stop the Federal Reserve from making this grievous mistake that could stifle financial innovation and forever politicize the banking sector.

Read the full article at The Wall Street Journal.