China has established itself as a pioneer in yet another high-tech field: that of blockchain-based central-bank digital currencies, or CBDCs. It’s not surprising that China would embrace such a technology. What is surprising is the interest in Chinese-style CBDCs in the White House, and even among governors of the Federal Reserve.
CBDCs work by marrying the technology underlying Bitcoin with the monetary policies of traditional fiat currencies like the U.S. dollar or the renminbi. But unlike Bitcoin, whose transactions run on a decentralized network and are impossible to censor, CBDCs are wholly controlled and tracked by the government. Despite official denials, China’s digital yuan project — called e-CNY — will enable the government to achieve total financial surveillance of its population. Every time a Chinese citizen buys so much as a soft drink, the People’s Bank of China (PBOC) will know about it.
“CBDC” may be an obscure acronym to most—it stands for “central bank digital currency”—but it is the single biggest threat to Americans’ personal and economic freedom being seriously considered by the U.S. government. My latest in @NRO: https://t.co/BCLwaqxxvg— Avik Roy (@Avik) October 8, 2021
Saule Omarova, President Biden’s nominee to lead the Office of the Comptroller of the Currency, is a champion of bringing a Chinese-style CBDC to America. In a 2020 Cornell Law School paper, Omarova wrote that adopting a full-fledged CBDC in the U.S. would enable the Fed to “fully replace — rather than compete with — private bank deposits” and to establish Fed control over “the very process of generation and allocation of financial resources, . . . directly crediting and debiting the accounts of all participants in economic activity.” That would amount to transferring Congress’s constitutional power of the purse to the unelected Federal Reserve Board