CATO Institute: CBDC the ‘Single Largest Assault to Financial Privacy Since Creation of Bank Secrecy Act’

0 5

knife

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 government to control citizens’ financial transactions. Such control could be preemptive (prohibiting and limiting purchases), behavioural (spurring and curbing purchases), or punitive (freezing and seizing funds).

The policy document also suggested that a CBDC will pose a threat to free markets and will give cybercriminals “a prominent platform on which to focus their efforts.”

To prevent the U.S. Federal Reserve from creating these risks, the two authors recommend that the U.S. Congress “should explicitly prohibit” the U.S. Treasury and central bank from issuing digital currency in any form. This can be done by amending Section 13 of the Federal Reserve Act and by limiting the U.S. “Treasury’s authority to expand existing offerings.”

The authors also recommend that the U.S. Congress must “require that the Fed’s compliance with the Depository Institutions Deregulation and Monetary Control Act’s cost recovery provisions be subject to regular audits by third parties.”

What are your thoughts on this story? Let us know what you think in the comments section below.

Leave A Reply

Your email address will not be published.

bitcoin
Bitcoin (BTC) $ 51,580.82
ethereum
Ethereum (ETH) $ 2,988.48
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 381.80
solana
Solana (SOL) $ 104.18
xrp
XRP (XRP) $ 0.545663
staked-ether
Lido Staked Ether (STETH) $ 2,987.30
usd-coin
USDC (USDC) $ 1.00
cardano
Cardano (ADA) $ 0.595415
avalanche-2
Avalanche (AVAX) $ 36.76
dogecoin
Dogecoin (DOGE) $ 0.086037
tron
TRON (TRX) $ 0.137558
chainlink
Chainlink (LINK) $ 18.48
polkadot
Polkadot (DOT) $ 7.83
matic-network
Polygon (MATIC) $ 0.995125
uniswap
Uniswap (UNI) $ 11.25
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 51,614.83
the-open-network
Toncoin (TON) $ 2.11
internet-computer
Internet Computer (ICP) $ 12.56
shiba-inu
Shiba Inu (SHIB) $ 0.00001
bitcoin-cash
Bitcoin Cash (BCH) $ 267.49
litecoin
Litecoin (LTC) $ 70.46
dai
Dai (DAI) $ 0.99926
immutable-x
Immutable (IMX) $ 3.08
filecoin
Filecoin (FIL) $ 7.97
cosmos
Cosmos Hub (ATOM) $ 10.39
near
NEAR Protocol (NEAR) $ 3.87
leo-token
LEO Token (LEO) $ 4.20
kaspa
Kaspa (KAS) $ 0.169906
blockstack
Stacks (STX) $ 2.59
ethereum-classic
Ethereum Classic (ETC) $ 26.14
hedera-hashgraph
Hedera (HBAR) $ 0.109856
bittensor
Bittensor (TAO) $ 567.71
optimism
Optimism (OP) $ 3.67
aptos
Aptos (APT) $ 9.44
stellar
Stellar (XLM) $ 0.116601
first-digital-usd
First Digital USD (FDUSD) $ 1.00
vechain
VeChain (VET) $ 0.04448
okb
OKB (OKB) $ 51.41
injective-protocol
Injective (INJ) $ 34.58
lido-dao
Lido DAO (LDO) $ 3.31
celestia
Celestia (TIA) $ 16.97
render-token
Render (RNDR) $ 7.23
the-graph
The Graph (GRT) $ 0.271886
mantle
Mantle (MNT) $ 0.780068
crypto-com-chain
Cronos (CRO) $ 0.094324
arbitrum
Arbitrum (ARB) $ 1.84
monero
Monero (XMR) $ 123.51
sei-network
Sei (SEI) $ 0.854701
sui
Sui (SUI) $ 1.64
maker
Maker (MKR) $ 2,031.95
rocket-pool-eth
Rocket Pool ETH (RETH) $ 3,285.84
beam-2
Beam (BEAM) $ 0.032955
thorchain
THORChain (RUNE) $ 5.42
algorand
Algorand (ALGO) $ 0.196446
mantle-staked-ether
Mantle Staked Ether (METH) $ 3,049.13
elrond-erd-2
MultiversX (EGLD) $ 58.22
quant-network
Quant (QNT) $ 104.17
dydx-chain
dYdX (DYDX) $ 3.54
flow
Flow (FLOW) $ 1.01
bitcoin-sv
Bitcoin SV (BSV) $ 75.71
aave
Aave (AAVE) $ 100.33
bitget-token
Bitget Token (BGB) $ 0.998342
flare-networks
Flare (FLR) $ 0.040718
starknet
Starknet (STRK) $ 1.91
mina-protocol
Mina Protocol (MINA) $ 1.31
ordinals
ORDI (ORDI) $ 64.41
theta-token
Theta Network (THETA) $ 1.33
havven
Synthetix Network (SNX) $ 4.02
helium
Helium (HNT) $ 8.88
true-usd
TrueUSD (TUSD) $ 0.973591
tokenize-xchange
Tokenize Xchange (TKX) $ 15.55
fantom
Fantom (FTM) $ 0.419685
the-sandbox
The Sandbox (SAND) $ 0.521819
blur
Blur (BLUR) $ 0.791421
chiliz
Chiliz (CHZ) $ 0.126059
axie-infinity
Axie Infinity (AXS) $ 8.07
fetch-ai
Fetch.ai (FET) $ 1.07
worldcoin-wld
Worldcoin (WLD) $ 8.13
dydx
dYdX (ETHDYDX) $ 3.54
bittorrent
BitTorrent (BTT) $ 0.000001
apecoin
ApeCoin (APE) $ 1.76
gala
GALA (GALA) $ 0.029824
whitebit
WhiteBIT Coin (WBT) $ 7.05
tezos
Tezos (XTZ) $ 1.12
kucoin-shares
KuCoin (KCS) $ 10.45
cheelee
Cheelee (CHEEL) $ 18.59
osmosis
Osmosis (OSMO) $ 1.58
sats-ordinals
SATS (Ordinals) (SATS) $ 0.00000047722786
woo-network
WOO (WOO) $ 0.533438
decentraland
Decentraland (MANA) $ 0.500165
conflux-token
Conflux (CFX) $ 0.246852
dymension
Dymension (DYM) $ 6.32
akash-network
Akash Network (AKT) $ 4.02
singularitynet
SingularityNET (AGIX) $ 0.735235
eos
EOS (EOS) $ 0.800349
frax-ether
Frax Ether (FRXETH) $ 2,978.68
arweave
Arweave (AR) $ 13.79
astar
Astar (ASTR) $ 0.16166
neo
NEO (NEO) $ 12.74