A policy analysis paper released by the CATO Institute states that a central bank digital currency (CBDC) could be “the biggest assault on financial privacy since the creation of the Bank Secrecy Act.” To prevent the US Federal Reserve and Treasury from threatening the financial system with CBDCs, the document said that the US Congress should “explicitly prohibit” its issuance.
CBDCs are a threat to financial privacy
A policy analysis paper released by the CATO Institute on April 4 warned that a central bank digital currency could be harmful to the American people. To support this claim, the analysis paper points to two-thirds of the 2,052 comment letters sent to the US Federal Reserve opposing the plan to launch a CBDC.
– Advertisement –
Written by Nicolas Anthony and Norbert Michel, the policy analysis paper also lists some of the concerns about CBDCs that have been raised and how the associated risks make CBDCs unsuitable for Americans. as seen in documentA major concern raised by CBDC opponents is that it threatens Americans’ right to financial privacy.
“Laws designed to combat terrorism, prevent money laundering, and collect taxes largely give governments the ability to conduct unchecked surveillance over financial information. Yet, for what little protection a CBDC has left, could wreak havoc as it would give the federal government complete visibility into every financial transaction by establishing a direct link between the financial activity of the government and each citizen,” the analysis document said.
– Advertisement –
While this feat is something the US government wants to do, the authors claim that issuing a CBDC is what they call “the biggest assault on financial privacy since the creation and inception of the Bank Secrecy Act.” Third-Party Doctrine.
sought the intervention of the US Congress
– Advertisement –
In addition to being a threat to citizens’ right to privacy guaranteed by the US Constitution, Anthony and Mitchell claimed that CBDCs could also be a threat to financial freedom. They said:
A CBDC would provide countless opportunities for the government to control citizens’ financial transactions. Such control may be preemptive (prohibit and limit purchases), pragmatic (prevent and deter purchases), or punitive (freeze and seize funds).
The policy document also suggested that CBDCs would pose a threat to free markets and give cybercriminals “a prime platform to focus their efforts.”
To prevent the US Federal Reserve from creating these risks, the two authors recommend that the US Congress should “explicitly prohibit” the US Treasury and central banks from issuing any form of digital currency. This could be done by amending Section 13 of the Federal Reserve Act and limiting the “Treasury’s authority to expand existing offerings”.
The authors also recommend that the US Congress “require that the Fed’s compliance with the cost recovery provisions of the Depository Institutions Deregulation and Monetary Control Act be subject to regular third-party audits.”
What are your thoughts on this story? Tell us what you think in the comments section below.
disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services or companies. bitcoin.com Does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services described in this article.
