Bourgeois United States recall tank the Heritage Foundation argues that instead of launching a central bank digital currency (CBDC), the government should ensure that the public can use the currencies they prefer, including private ones.

In a commentary piece published on Feb. 12, the Heritage Foundation notes that Facebook's Libra global stablecoin project "is just the latest reminder that providing money does not have to be a centralized function of government." The report answers to the idea that the public sector must ensure that sovereign currencies stay at the center of each nation's financial system:

"Government officials should not suppress alternative forms of money to protect sovereign currencies; they should protect people's power to make up one's mind what forms of coin are the best means of payment."

Consumer sovereignty, not budgetary sovereignty

The report argues that the principle of monetary sovereignty that member of the U.South. Federal Reserve'south Board of Governors Lael Brainard spoke nigh in Feb should be replaced with the concept of consumer sovereignty.

The Heritage Foundation cites the pop concerns that stablecoins and cryptocurrencies heighten the risk of crime and fraud, and notes that "the government does non demand to create its own digital currency to protect people from these bug." The newspaper claims:

"As with the existing payments system, any organisation based on cryptocurrencies can be policed by governments for fraud, consumer losses, and illicit activeness."

Competition betwixt the Federal Reserve and private banks

The study also cites concerns that the Federal Reserve should non compete with the private sector. The central bank allegedly competes with private banks with its real-time payment tool, which Cointelegraph reported is expected to be a threat to individual banks. The paper argues that a CBDC would also exist a type of competition detrimental to the individual sector:

"If everyone — not but banks or certain types of financial firms — has straight access to accounts at the Fed, then private banks volition be in straight competition with the central depository financial institution for retail customers. If the Fed moves in this direction, private banks will lose, and so will their customers. Ultimately, the federal regime would have full control over the coin going into — and out of — every person's account."

Per the report, direct government control over every person's account is function of the goal of such efforts. According to the Heritage Foundation, "this level of regime command simply is non compatible with economic and political freedom."

Talk of CBDCs in Washington

As Cointelegraph reported earlier this month, Brainard also said during the aforementioned talk that the institution is more open to the idea of fundamental bank digital currency than previously. Yesterday, Congressman Bill Foster questioned a Federal Reserve official on U.S CBDC progress and was told that the establishment is not however sure whether deploying such a digital currency is a good idea.