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Is the Digital Dollar Dead?

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Artist's conception of digital currency.

Legislators in both houses of Congress have introduced bills aimed at making sure a Central Bank Digital Currency doesn’t see the light of day.

Credit: Stephanie Arnett/MIT Technology Review

It's summer 2020. The world is under a series of lockdowns as the pandemic continues to run its course. And in academic and foreign policy circles, digital currencies are one of the hottest topics in town. 

China is well on its way to launching its own central bank digital currency, or CBDC, and many other countries have launched CBDC research projects. Even Facebook has proposed a global digital currency, called Libra

So when the Boston branch of the US Federal Reserve announces Project Hamilton, a collaboration with MIT's Digital Currency Initiative, to research how a CBDC might be technically designed—it doesn't raise many eyebrows. A hypothetical US central bank digital currency is hardly controversial, after all. And the US cannot afford to be left behind.

How things change. Three years later, the digital dollar—even though it doesn't exist and the Fed says it has no plans to issue one—has become political red meat. Tapping into voters' widespread opposition to government surveillance, a group of anti-CBDC politicians has emerged with the message that the digital dollar is something to fear.

From MIT Technology Review
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