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“At the apex of the pyramid
comes Big Brother. Big Brother is
infallible and all-powerful. Every
success, every achievement, every
victory, every scientific discovery,
all knowledge, all wisdom, all
happiness, all virtue, are held to
issue directly from his leadership
and inspiration.”
George Orwell, 1984
The Conversation
There is a lot of discussion about the prospect of a ‘Digital Dollar’ or a digital version of US currency.
Cryptocurrencies, debit cards and any form of online payment are already digital, so in one respect, the
notion does not seem all that foreign.
But the Digital Dollar debate is about something different. It’s a discussion about a U.S. government backed
digital currency also referred to as a Central Bank Digital Currency (CBDC). The Board of Governors of the
Federal Reserve describes it as follows:
“CBDC is generally defined as a digital liability of a central bank that is widely available to the general
public. Today in the United States, Federal Reserve notes (i.e., physical currency) are the only type
of central bank money available to the general public. Like existing forms of money, a CBDC would
enable the general public to make digital payments. As a liability of the Federal Reserve, however,
a CBDC would be the safest digital asset available to the general public, with no associated credit
or liquidity risk.” 1
On its surface, it sounds straightforward — even wildly advantageous. But the notion of a Digital Dollar
replacing cash has brought strong reactions from consumers, investors, privacy protectors and civil liberty
advocates. Those in favor of adopting an electronic form of the U.S. dollar cite payment speed, transactional
efficiency, lower settlement costs, and easier international payments. Those against the adoption
of a Digital Dollar voice strong concerns about security, volatility, privacy and above all
government control.
1 https://www.federalreserve.gov/central-bank-digital-currency.htm
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All the World’s a Stage for CBDC’s
The Digital Dollar Project, a group designed to advance research and promote a U.S. Central Bank Digital
Currency, was started back in 2020 by former Commodity Futures Trading Commission chairman Christopher
Giancarlo. The group describes themselves and their mission as follows:
“The Digital Dollar Project is a nonprofit organization created to encourage research and public
discussion on the potential advantages and challenges of a U.S. Central Bank Digital Currency (CBDC)
— or a “digital dollar.” The Project is focused on convening private sector thought leaders and
proposes possible models to support the public sector through pilot experimentation and working
groups. The DDP will identify options for a potential CBDC solution to help enhance monetary
policy effectiveness and financial stability; provide needed scalability, security and privacy in retail,
wholesale, and international payments; and integrate with existing financial infrastructures.”2
That is quite the charter and seems well beyond the “discussion stage.” In fact, a Digital Dollar is being pushed
by the Fed, several major banks, the media, and the White House which enacted Executive Order 14067 in
March of 2022 called, “Ensuring Responsible Development of Digital Assets.”3 Embedded in the language
are a variety of objectives that the administration describes as “national goals” including advancing digital
payment technology, securing American leadership in the global financial system as well as using
the ‘technological architecture’ of digital assets to promote equitable access to
financial services, address climate change, and exercise human rights.
2 https://digitaldollarproject.org/
3 https://www.federalregister.gov/documents/2022/03/14/2022-05471/ensuring-responsible-
development-of-digital-assets
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In a speech to the Atlantic Council earlier this year, Undersecretary for Domestic Finance, Nellie Liang
announced that a rather robust “working group” had been formed to explore the development of a CBDC:
“In the coming months, leaders from Treasury, the Federal Reserve, and White House offices, including
the Council of Economic Advisors, National Economic Council, National Security Council, and Office
of Science and Technology Policy, will begin to meet regularly to discuss a possible CDBC and other
payments innovations. To support these discussions, the CBDC Working Group is developing an initial
set of findings and recommendations … Also, as recommended in the Treasury’s Report on the Future
of Money and Payments, the Federal Reserve is encouraged to provide periodic public updates as it
continues its research and technical experimentation on CBDCs.”4
4 https://home.treasury.gov/news/press-releases/jy1314
This multi-agency cooperation represents one of the broadest federal
efforts yet to adopt a Digital Dollar.
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The United States is far from alone in its CBDC ambitions. According to the IMF, more than half of the world’s
central banks are now either exploring or developing digital currencies5. In addition, the Atlantic Council’s
Central Bank Digital Currency Tracker6, reveals that countries representing 95% of global GDP are exploring
a CBDC with all G7 economies now in the development stage, and 18 of the G20 countries now in advanced
stages of digital currency development.
This enthusiastic global embrace of digital sovereign currencies does not, however, mean that every day
Americans are overly warm to the idea. A recent essay in Politico, called “The Digital Dollar’s Bipartisan
Problem,” outlines the skepticism and concerns on both sides of the U.S. political aisle:
“Opposition to centralized control of money is deep-seated in American political history — dating
back to fights over central banking that split the country’s founders … While populist fears that a
digital dollar could be used to enhance government power sound to many like the stuff of an Alex
Jones “Info Wars” episode, Steven Lubka, head of private clients and family offices at Swan Bitcoin,
an investment firm focused on the original digital asset, said that some sophisticated investors voice
the same concerns in private. They include fears that a CBDC will be used to implement a Chinese-
style social credit system, punish donors to politically disfavored causes, or impose quotas on meat
consumption.”7
5 https://www.imf.org/en/Publications/fandd/issues/2022/09/Picture-this-The-ascent-of-CBDCs
6 https://www.atlanticcouncil.org/cbdctracker/
7 https://www.politico.com/news/2023/06/13/the-digital-dollars-bipartisan-problem-00101694
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The Question of Trust in CBDC’s
A recent poll by the Cato Institute
concluded that Americans are generally
uncomfortable and/or unfamiliar with
the idea of a Digital Dollar with just 16%
supporting a Federal Reserve CBDC.8 This,
despite our already extensive use of credit
cards, debit cards, and payment apps. Most
Republicans and Independents oppose the
development of a Digital Dollar, Democrats
seem split on the concept but a larger
portion of Americans simply don’t know
enough about it.
Our digital footprint and the traceable, trackable trail of data that we leave behind each time we Google
Pay, Zelle, Venmo, PayPal, bank, buy or charge anything online — leaves little to the imagination. It says
precisely what we bought and how much we spent. It reveals where we’ve been and what we
did there.
8 https://www.cato.org/survey-reports/poll-only-16-americans-support-government-issuing-central-
bank-digital-currency
Source: Cato Institute 2023 CBDC National Survey
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And for those who strongly oppose CBDC’s due to privacy concerns, a Digital Dollar would in many respects
be the equivalent of a federal homing device or transaction tracer. It would give the government an
unprecedented window into the patterns and preferences of our lives.
Brad Polumbo of the Foundation for Economic Education (FEE) paints a disturbing scenario of how our
digital bread crumbs could empower the Feds in what he describes as borderline dystopian.9
“A central bank digital currency would allow the government to track your every purchase. It could also be
easily used to restrict purchases. For example, imagine a future government deciding that gasoline must
be rationed in order to address climate change. Your “digital dollars” could be made to stop working at
the gas pump once you’ve purchased a certain amount of gasoline in a week. In this way, a central bank
digital currency would open up new avenues for the government to assert control over our everyday lives.
It would make our wealth and incomes truly less our own.”
And the concerns about federal overreach, don’t stop there. Could the Fed could use the Digital Dollar to
track down Americans who owe taxes, freeze the accounts of those they politically oppose, or profile
others based upon their purchasing and/or lifestyle preferences? These concepts would seem far-
fetched at any other time in our nation’s history — but now.
9 https://fee.org/articles/why-a-digital-dollar-is-a-really-bad-idea/
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10 https://www2.cbn.com/news/us/digital-dollar-coming-soon-some-financial-experts-warn-it-could-
be-instrument-government
11 https://www.forbes.com/sites/siladityaray/2022/02/23/canada-begins-to-release-frozen-bank-
accounts-of-freedom-convoy-protestors/?sh=6db7f0086364
“If I buy anything, the government doesn’t know it. But with this new central bank digital currency, they
will, because they maintain the ledger. So, if I buy Ron Desantis’s new book or I go to a Donald Trump rally
or whatever it may be, the government using artificial intelligence and having that information, are able
to profile you. They could say, ‘Well, this guy kind of looks like a conservative and maybe he’s MAGA.’ Then
you’ve got a target on your back.”10
Lest we forget when the Canadian government froze over 200 bank accounts of individuals linked to the
‘Freedom Convoy,’ anti-vaccine trucker protests in Ottawa in February of 2022. The move by Canadian Prime
Minister Justin Trudeau seized over $6 million from private accounts which critics maintained included those
who merely donated to the cause.11
According to investment banker
and author James Rickards, the
“removal of cash would move
America closer to a
totalitarian state.”
“If I buy anything, the government
doesn’t know it. But with this new
central bank digital currency, they
will, because they maintain the
ledger. So, if I buy Ron Desantis’s
new book or I go to a Donald
Trump rally or whatever it may
be, the government using artificial
intelligence and having that
information, are able to profile
you. They could say, ‘Well, this guy
kind of looks like a conservative
and maybe he’s MAGA.’ Then
you’ve got a target on your back.”10
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Similarly, in August of 2022 during national political protests, the Pakistani government threatened to block
the digital IDs of supporters of ousted Prime Minister Imran Khan — preventing them from accessing their
personal bank accounts. The government further threatened to use Pakistan’s digital ID system to block the
passports and even arrest those opposing the new government.12
While proponents of a CBDC argue that paper currency is inconvenient, unstable, unsanitary, subject to
counterfeit, and susceptible to over-issue — it also provides a means of autonomy and anonymity. The
Digital Dollar, however, is ripe for hacking, tracking and federal abuse.
In “The Risk of CBDC’s: Why Central Bank Digital Currencies Shouldn’t Be Adopted,” published by the Cato Institute
in February of 2023, authors Norbert Michel and Nicholas Anthony put the Digital Dollar further into context:
12 https://www.biometricupdate.com/202208/pakistani-political-hecklers-threatened-with-blocked-
biometric-id-bank-accounts
13 https://www.fdic.gov/resources/bankers/bank-secrecy-act
14 https://www.cato.org/study/risks-of-cbdcs
“Put simply, a CBDC would most likely be the single largest assault to financial privacy since the creation
of the Bank Secrecy Act13 and the establishment of the third-party doctrine. The threat to freedom that
a CBDC could pose is closely related to its threat to privacy. With so much data in hand, a CBDC would
provide countless opportunities for the government to control citizens’ financial activity.”
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10
“Money is Gold and Nothing Else”
The year is 1912 and banking titan J.P. Morgan was called to testify15
before a congressional subcommittee, called the Pujo Committee
which was tasked with investigating a “money trust” accused of using
power and influence to control the banking industry. Samuel Untermyer
was counsel and investigator for the government committee:
Mr. Untermyer: I want to ask you a few questions bearing on the subject
that you have touched upon this morning, as to the control of money. The
control of credit involves a control of money, does it not?
Mr. Morgan: A control of credit? No.
Mr. Untermyer: But the basis of banking is credit, is it not?
Mr. Morgan. Not always. That is an evidence of banking, but it is not the money itself. Money is gold, and
nothing else.
Mr. Untermyer. Do you not know that the basis of banking all over the world is credit rather than gold?
Mr. Morgan. It is the basis of credit, but it is not the basis of money.
15 https://www.scribd.com/doc/144687491/JP-Morgan-Testimony-1912