Last Updated on June 20, 2022
The Federal Reserve (FED) is rolling out plans to develop a “Digital Dollar”, according to FED President Jerome Powell. According to a report in Reuters, there had been speculation that such a thing would develop in response to the popularity in cryptocurrencies and the decreasing value of the US Dollar (USD). Critics of the Digital Dollar, or what is often referred to as a Central Bank Digital Currency (CBDC) point to the idea that the FED will have the power to freeze accounts on an arbitrary basis.
Powell announced the venture on Friday, stressing that the project is aimed at maintaining the USD’s standing as a global reserve currency, meaning that it is one of the most widely used currencies in the world along with the Chinese Yuan, the Euro, and others. Russia and China have tried to displace the USD as the world’s primary currency.
Some economists speculate that a cryptocurrency such as Bitcoin could eventually wind up being the world’s most prevalent reserve currency. Bitcoin has a capped supply at 21 million units, so it cannot be devalued through currency manipulation, such as printing. It is also completely decentralized. A digital dollar would be controlled by the FED, which is technically a private entity (a bank), but has proven to be a quasi-government agency, printing money and changing interest rates in response to various policies. Despite this, the FED is practically unaccountable to voters.
Concern that some people have about centralized finance is not unfounded. Large financial institutions have already singled out several dissident figures. Several right wing activists and politicians have even had accounts frozen and funds seized. Prominent examples involve former GOP Senate candidate Lauren Witzke having her Wells Fargo account shut down and political commentator Nick Fuentes having approximately half a million dollars removed from his account at the behest of the DOJ for his participation in the election integrity rally in Washington on January 6, 2021.
Skeptics of the digital dollar point out that giving the FED (and by extension, the federal government) unlimited control over the finances over American citizens, a de facto social credit system would no longer be a fringe conspiracy, but a reality.
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