27 June 2023
he Federal Reserve’s announcement about exploring the potential benefits and risks of a Central Bank Digital Currency (CBDC) should be viewed skeptically. Despite their claim of no decision-making, it is doubtful that the powerful central bank would dismiss the idea of issuing its own CBDC. The Fed’s report on the U.S. Dollar in the Age of Digital Transformation raises concerns about the compatibility of central banking with public confidence and financial stability, given the inherent boom-bust cycle and negative externalities. The massive volume of public comments received during the submission period casts doubt on their influence on decision-making. The principles outlined by the Fed, such as protection and privacy, mask potential privacy infringements and the risk of government overreach.