United States CBDC Would ‘crowd Out’ Crypto Ecosystem: Ex-Biden Advisor

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The creation of a United States digital dollar would “crowd out” the cryptocurrency ecosystem and protect the national security of the U.S. according to a former top advisor in president Joe Biden’s administration.

Daleep Singh — a former Deputy National Security Advisor for International Economics in the Biden administration — made the comments at a Feb. 28 Senate Banking Committee hearing, suggesting that cryptocurrencies facilitate ransomware attacks and contribute to the evasion of U.S. sanctions.

[एम्बेडेड सामग्री]

Singh believes the U.S. government embracing a Central Bank Digital Currency (CBDC) “is the single best step that we could take [to protect national interests] because it would crowd out the ecosystem of crypto.”

Singh frames “crowding out” as a desirable development in his discussion of a CBDC but the phrase is generally used by economists to refer to how investments from governments can drive down or eliminate investments from private firms that could limit job creation and slow economic growth.

In an interview with Cointelegraph in May 2022, Franklin Noll — the president of Consulting firm Noll Historical Consulting — also suggested that CBDCs could crowd out crypto, नोटिंग:

"क्रिप्टोकरेंसी के लिए नकारात्मक पक्ष यह है कि सीबीडीसी निजी क्रिप्टोकरेंसी को बाहर करने के लिए काम करेगा, विशेष रूप से खुदरा भुगतान क्षेत्रों पर केंद्रित स्थिर स्टॉक। भुगतान प्रणाली में क्रिप्टोकाउंक्शंस निचे में रहेंगे जहां वे अद्वितीय कार्य करते हैं और विशेष सेवाएं प्रदान करते हैं।

While China has implemented its own CBDC, the U.S. is still exploring the potential benefits and risks associated with CBDCs.

Yana Fanusie, the policy lead at the crypto advocacy group Crypto Council for Innovation suggested in a Mar. 1 साक्षात्कार with Bloomberg that China is “leading the way” on CBDC development while the U.S. is “on the sidelines.”

संबंधित: बैंक ऑफ़ इंग्लैंड के पास अभी तक CBDC जारी करने के लिए कोई तकनीकी कौशल नहीं है: डिप्टी गवर्नर

He added that developing alternative financial rails could spell “trouble” to the U.S. as they affect the “potency” of its power to enforce sanctions.

Others are more critical of the digital dollar plans such as Representative Tom Emmer, who introduced legislation on Feb. 22 prohibiting the Federal Reserve from implementing monetary policy based on a CBDC and issuing a digital dollar directly to individuals.

Emmer is concerned that a CBDC could impact the financial privacy of American citizens, and be developed into a “dangerous surveillance tool.”

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