The Fed’s Digital Dollar Would Be ‘Nightmareville’ for Privacy – Reason.com

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The U.S. government is thinking about creating an electronic currency backed directly by the dollar, an idea dubbed the “digital dollar” or “Fedcoin.” Such a step could severely damage trust in the dollar and risk Americans’ privacy.

Blockchain technology has allowed countries across the world—most notably Chinato create central bank digital currencies (CBDCs), which allow people to exchange money electronically without going through a bank or a secondary service such as PayPal or Venmo. 

In a recent video, U.S. Federal Reserve Chair Jerome Powell announced that the Fed intends to issue a discussion paper about the “benefits and risks associated with CBDC in the U.S. context.” While Powell’s statement was generally neutral, stressing the importance of taking time to assess “the broader risks and opportunities,” other oficials have more pointedly favored the idea. Fed Governor Lael Brainard endorsed a digital dollar…

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