A central bank digital currency (CBDC) may turn out to be the “single largest assault to financial privacy since the creation of the Bank Secrecy Act,” a policy analysis document released by CATO Institute has said. To stop the U.S. Federal Reserve and Treasury from threatening the financial system with the CBDC, the document said the U.S. Congress “should explicitly prohibit” its issuance.
CBDCs a Threat to Financial Privacy
A policy analysis document released on April 4 by the CATO Institute warns that a central bank digital currency could be detrimental to the American people. To support this assertion, the analysis document points to the two-thirds of the 2,052 comment letters sent to the U.S. Federal Reserve that oppose plans to launch a CBDC.
Authored by Nicholas Anthony and Norbert Michel, the policy analysis document also lists some of the concerns about CBDCs that have been raised and how the associated risks make the CBDC unsuitable for Americans. As seen in the document, one key concern raised by CBDC opponents is the threat this poses to Americans’ right to financial privacy.
“Laws designed to counter-terrorism, deter money laundering, and collect taxes largely provide the government with the ability to conduct unchecked surveillance over financial information. Nonetheless, a CBDC could spell doom for what little protection remains because it would give the federal government complete visibility into every financial transaction by establishing a direct link between the government and each citizen’s financial activity,” the analysis document stated.
While attaining this feat is something the U.S. government may want to do, the authors assert that the issuance of the CBDC would amount to what they call the “single largest assault to financial privacy since the creation of the Bank Secrecy Act and the establishment of the third-party doctrine.”
US Congressional Intervention Sought
Besides being a threat to citizens’ right to privacy as guaranteed by the U.S. constitution, Anthony and Michel claimed that a CBDC is likely to be a threat to financial freedom as well. They said:
A CBDC would provide countless opportunities for the go
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Author: Terence Zimwara
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