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The Digital Dollar Project Statement Regarding the Federal Reserve Board’s Central Bank Digital Currency Discussion Paper

·4 min read

WASHINGTON, January 21, 2022--(BUSINESS WIRE)--The Digital Dollar Project (DDP) today issued the below statements regarding The Federal Reserve Board’s discussion paper titled Money and Payments: The U.S. Dollar in the Age of Digital Transformation, released on January 20, 2022. The paper examines the pros and cons of a potential U.S. central bank digital currency (CBDC).

"The Digital Dollar Project commends the Federal Reserve’s CBDC policy paper. As our nation takes up exploration of a U.S. Central Bank Digital Currency, we must ensure that the values that are enshrined in the dollar today – global acceptance, stable economics, the rule of law, free enterprise, freedom of speech, and, yes, individual privacy – are embraced in the digital future of money. We are committed to continuing our support of this journey," said The Digital Dollar Project Executive Chairman J. Christopher Giancarlo, former Chairman of the U.S. Commodities Futures Trading Commission.

Statement by The Digital Dollar Project Executive Director Jennifer Lassiter:

"The Federal Reserve Board’s discussion paper on CBDCs is a welcome and critical addition to the ongoing exploration of a U.S. CBDC. As the report outlines, CBDCs and their underlying technologies have the potential for positive societal and economic benefits, such as supporting the dollar’s international role; promoting financial inclusion; safely meeting future needs and demands for payment services; and preventing illicit transactions.

The Fed’s initial proposal of a U.S. CBDC to be privacy-protected, intermediated, widely transferrable, and identity-verified aligns with The Digital Dollar Project’s proposed model of a "digital dollar" as outlined in its May 2020 white paper: Exploring a U.S. CBDC. While the Fed’s discussion paper does not commit to one policy choice, it does thoughtfully outline CBDC benefits, risks, and policy considerations.

The Fed’s prioritization of public outreach through a request for public comment followed by targeted outreach and public forums is reflective of the intentional approach required to reimagine the U.S.’ complex money and payment systems. The Fed’s commitment to continued participation in developing international standards acknowledges the speed at which CBDC creation and adoption is unfolding globally and the criticality of including democratic principles in those discussions.

It is encouraging to see the Fed’s attention to privacy concerns regarding a U.S. CBDC. A deeper understanding of how the Federal Reserve defines ‘consumer privacy’ within the context of broader U.S. Constitutional privacy protections is imperative in the evaluation of U.S. CBDC design choices. In November 2021, The Digital Dollar Project released CBDC Privacy Principles highlighting the unique opportunity for CBDCs to offer Fourth Amendment privacy protections in terms of both technology and public policy considerations. Consumer privacy is certainly a critical privacy consideration, but one of many in this evolving digital era.

The Digital Dollar Project and its participant community look forward to commenting on the Federal Reserve Board paper and continuing to convene private sector thought leaders and actors to propose and test possible CBDC models for public sector consideration."

The DDP is open to participants from all relevant sectors, including commercial institutions, the innovation community, non-profit organizations and universities that want to lead or participate in pilots. The DDP is working in collaboration with pilot partners to explore the challenges and opportunities of a U.S. CBDC through a deliberative process, including pilots, stakeholder meetings, roundtable discussions, and open forums.

About The Digital Dollar Project (DDP)

A non-profit organization, The Digital Dollar Project was created to encourage research and public discussion on the potential advantages and challenges of a U.S. CBDC — or a "digital dollar." The DDP will identify options for a CBDC solution to help enhance monetary policy effectiveness and financial stability; provide needed scalability, security and privacy in retail, wholesale and international payments; and integrate with existing financial infrastructures, including U.S. Federal Reserve-related projects. Visit http://digitaldollarproject.org.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220121005446/en/

Contacts

Media Contacts:
Alexa Stewart
DDP Public Relations
+1.781.876.6242
astewart@virtualinc.com

Jessie Hennion
DDP Public Relations
+1 781-876-6280
Jhennion@virtualinc.com