The creation of a digital US dollar would “displace” the cryptocurrency ecosystem and protect US national security, according to a former top adviser to President Joe Biden’s administration.
Daleep Singh – former deputy national security adviser for international economics in the Biden administration – made these comments at a Senate Banking Committee hearing on February 28, suggesting that cryptocurrencies facilitate ransomware attacks and contribute to the evasion of US sanctions.
Singh believes that the US government’s adoption of a central bank digital currency (CBDC) “is the best step we could take. [para proteger los intereses nacionales] because it would displace the cryptocurrency ecosystem.”
Singh frames “displacement” as a desirable development in his discussion of a CBDC, But the phrase is generally used by economists to refer to how investment by governments can reduce or eliminate investment by private companies that could limit job creation and slow economic growth.
In an interview with Cointelegraph laMay, Franklin Noll, president of consultancy Noll Historical Consulting, also suggested that CBDCs could displace cryptocurrencies:
“The downside for cryptocurrencies is that CBDCs will work to crowd out private cryptocurrencies, especially stablecoins focused on retail payment areas. Cryptocurrencies will stay in niches of the payment system where they fulfill unique functions and provide specialized services.”
Although China has launched its own CBDC, The United States is still exploring the potential benefits and risks associated with CBDCs.
Yana Fanusie, policy leader at cryptocurrency advocacy group Crypto Council for Innovation, said in an interview with Bloomberg on March 1 that China is “leading the way” in developing a CBDC while the United States is “on the sidelines.”
He added that the development of alternative financial channels could pose “problems” for the United States, since they affect the “potency” of its power to apply sanctions.
Others are more critical of the digital dollar plans, like Rep. Tom Emmer, who introduced legislation on February 22 that prohibits the Federal Reserve from applying CBDC-based monetary policy and issuing a digital dollar directly to individuals.
Emmer is concerned that a CBDC could affect the financial privacy of US citizens and become a “dangerous surveillance tool.”
The Biden admin wants to create a surveillance-style digital dollar that is NOT:
❌Open
❌Permissionless
❌PrivateThat’s why I introduced legislation to prevent unelected bureaucrats from stripping Americans of their right to financial privacy. pic.twitter.com/55e2nfmlJy
— Tom Emmer (@GOPMajorityWhip) February 28, 2023
The Biden administration wants to create a surveillance-style digital dollar that is NOT:
❌Open
❌Without permission
❌Private
That’s why I introduced legislation to stop unelected bureaucrats from stripping Americans of their right to financial privacy.
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