United States CBDC would ‘crowd out’ crypto ecosystem: Ex-Biden advisor

According to a former top adviser to the Joe Biden administration, the creation of a U.S. digital dollar would “keep out” the cryptocurrency ecosystem and protect U.S. national security.

Daleep Singh — former Deputy National Security Advisor for International Economics in the Biden administration — commented at a Senate Banking Committee hearing on Feb. suggested that it contributed

Singh believes that the U.S. government’s adoption of a Central Bank Digital Currency (CBDC) is “the only best step we can take. [to protect national interests] Because it keeps the crypto ecosystem out. ”

Singh sees “crowding out” as a desirable development in the CBDC debate, a phrase commonly used by economists to suggest that government investment could limit job creation and slow economic growth. It is used to refer to how investment from potential private companies can be discouraged or eliminated.

In a May 2022 interview with Cointelegraph, Franklin Knoll, president of consulting firm Knoll Historical Consulting, also suggested that a CBDC could keep cryptocurrencies out, noting:

“The downside of cryptocurrencies is that CBDC works to keep private cryptocurrencies out, especially stablecoins focused on the retail payments space. It will remain in the niche of payment systems that offer a variety of services.”

While China is implementing its own CBDC, the US is still investigating potential benefits and risks associated with CBDC.

Yana Fanuzy, policy director of the Crypto Council for Innovation, a crypto advocacy group, proposed on March 1. interview Bloomberg says China is “leading the way” in CBDC development, while the US is a “bystander.”

Related: Bank of England does not yet have the technical skills to issue CBDCs: Deputy Governor

He added that developing an alternative financial rail could pose “problems” for the United States as it would affect the “efficacy” of its power to enforce sanctions.

Others, such as Rep. Tom Emer, who introduced a law on Feb. 22 that would prohibit the Federal Reserve from implementing a CBDC-based monetary policy and issuing digital dollars directly to individuals, said the Digital Dollar Plan more critical of

Emer is concerned that CBDC will affect the economic privacy of American citizens and could develop into a “dangerous surveillance tool.”