The Biden Administration and the Federal Reserve are taking steps toward the potential roll-out of a central bank digital currency (CBDC). In attempting to do so, they are ignoring serious concerns about consumer privacy and heavy-handed government control in the U.S. and abroad.
Everywhere around the world, powerful heads of central banks and politicians are pushing central bank digital currency. Yet also around the globe – from the U.S. to Europe to Africa – more and more of the general populace are rejecting CBDCs as they learn what they would entail and experience them in practice.
A CBDC is a digital form of a national currency issued or coordinated by a nation’s central bank. Unlike paper or a private decentralized digital currency, a CBDC leaves an electronic trail of purchases and sales within a government digital ledger. Ledgers of such information are in the hands of governments that in many cases have a dark history of abuses of civil liberties.
Proponents say CBDC would lead to faster payments that would particularly benefit lower-income individuals. Yet critics argue the mechanism for CBDCs is ripe for abuse, allowing the government to violate financial privacy and reward and punish certain behaviors by controlling access to digital money.