It appears that US government-issued CBDC faces resistance from all over the country.
The Cato Institute, an American libertarian think tank headquartered in Washington, DC, has recently published a report emphasizing that a US government-issued central bank digital currency (CBDC) might pose significant risks.
In particular, Cato Institute claimed that CBDC threatens citizens’ privacy and fundamental freedoms, as well as challenges the private sector.
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At the beginning of its report, Cato Institute claims that the costs of launching CBDC “far outweigh the purported benefits that proponents promise.”
The institute’s report clearly states that CBDCs “should have no place in the American economy.” In the report, Cato Institute noted:
To prevent the risks to financial privacy, financial freedom, free markets, and cybersecurity that a CBDC would pose, Congress should explicitly prohibit the Federal Reserve and Treasury from issuing a CBDC in any form.
The Cato Institute identifies several primary concerns regarding the establishment of a government-issued CBDC, including issues related to surveillance and control, potential destabilization of the free market, and increased cybersecurity risks.
In the report, the authors emphasize the benefits of decentralization of the private sector compared to the federal government, explaining:
Whereas an IRS breach puts all 333 million Americans at risk, a breach at a private financial institution would affect only a fraction of citizens.
On top of that, the report suggests that the privacy risks of CBDCs could spread beyond the United States, given that the Federal Reserve indicates around 60% of global financial liabilities and claims are denominated in US dollars.
Cato Institute is not the only entity expressing disapproval of the US government-issued CBDC. At the end of March, Senator Ted Cruz introduced a bill prohibiting the Federal Reserve from developing a “direct-to-consumer” CBDC. Moreover, the Minnesota congressman, Tom Emmer, also claimed that CBDC could expose citizens to privacy risks.
by Gile K. – Crypto Analyst, BitDegree
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