This bill has just passed the US House of Representatives. Why is this important?
Today, we have Visa and Mastercard as our choice of digital payment. Some have floated crypto as an alternate, but crypto is complicated and not backed by an economy or central bank. Others have floated the idea of a central bank digital currency (CBDC) that matches the availability of Mastercard and Visa, but do not go through their services. It could also be used offline with smart devices.
Some critics have cited concerns over privacy, where the central government could collect information, while others have pointed out that Visa and Mastercard collect that sort of data anyways, and CBDCs might log less data if designed differently.
The point may soon become moot if the bill passes the Senate and receive the president’s signature
My take on this bill is that it’s a ban that should not be put into place. CBDC can still be issued to banks though, just not for you and me. It keeps Credit card companies able to charge high merchant fees.
If I were to write a bill on CBDC, I would put in privacy restrictions into the bill, but still allow for individual CBDC to be issued.
To me, if we saw a CBDC it would be important that the government is not able to prevent anyone from transacting with someone else, or to track who is giving money to who.
I imagine such a law would be dead on arrival, so kind of a moot point. But I would argue any CBDC should function like cash - fungible, not tracked (except in cases where they have to use old fashioned detective work)