Congressman Calls for Permanent Ban on Central Bank Digital Currency

A member of Congress stated that a central bank digital currency would allow the government to track every purchase made by individuals. The currency would record visits to gun stores, donations to churches or political causes, book purchases, medication acquisitions, and out-of-state travel, according to the commentary.

Cash and decentralized cryptocurrencies preserve financial choice, while a central bank digital currency would eliminate it, the piece said.

The commentary described a central bank digital currency as a direct liability of the central bank, making every transaction visible to the government in real time. It noted that central bankers and academics have discussed programmable features that could cause money to expire or restrict purchases to certain merchants.

China’s digital yuan is already being used for social control experiments, the commentary added.

Proponents claim a central bank digital currency is needed to compete with China or combat crime, but the commentary said these arguments do not hold up under scrutiny. A retail central bank digital currency could allow rapid withdrawals from banks during periods of stress, creating conditions for fast digital bank runs, the piece stated.

Smaller community banks would face particular challenges under such a system, according to the commentary.