{"id":1652574,"date":"2022-09-22T07:11:03","date_gmt":"2022-09-22T11:11:03","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1652574"},"modified":"2022-09-22T07:11:06","modified_gmt":"2022-09-22T11:11:06","slug":"white-house-exploring-risks-benefits-of-central-bank-digital-currency","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/white-house-exploring-risks-benefits-of-central-bank-digital-currency\/","title":{"rendered":"White House Exploring Risks, Benefits of Central Bank Digital Currency"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fwhite-house-exploring-risks-benefits-of-central-bank-digital-currency%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1652574&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The Biden administration is \u201cclosely examining\u201d the possibilities for issuing a <a href=\"https:\/\/www.theepochtimes.com\/t-central-bank-digital-currency\">central bank digital currency<\/a> (CBDC) based on a technical report prepared by the White House Office of Science and Technology Policy (<a href=\"https:\/\/www.whitehouse.gov\/wp-content\/uploads\/2022\/09\/09-2022-Technical-Evaluation-US-CBDC-System.pdf\">pdf<\/a>), along with other reports.<\/p>\n<p>\u201cIf the U.S. pursued a CBDC, there could be many possible benefits, such as facilitating efficient and low-cost transactions, fostering greater access to the financial system, boosting economic growth, and supporting the continued centrality of the U.S. within the international financial system,\u201d said Alondra Nelson, head of the White House Office of Science and Technology Policy in a <a href=\"https:\/\/www.whitehouse.gov\/ostp\/news-updates\/2022\/09\/16\/technical-possibilities-for-a-u-s-central-bank-digital-currency\/\">press briefing<\/a> on Sept. 16. \u201cHowever, a U.S. CBDC could also introduce a variety of risks, as it might affect everything ranging from the stability of the financial system to the protection of sensitive data.\u201d<\/p>\n<p>Based on Executive Order 14067, a central bank digital currency system should integrate seamlessly with traditional forms of the U.S. dollar, improve existing payment systems, ensure global financial interoperability, advance \u201cfinancial inclusion and equity,\u201d protect national security, \u201cprovide ability to exercise human rights,\u201d and \u201calign with democratic and environmental values, including <a href=\"https:\/\/www.theepochtimes.com\/t-privacy\">privacy<\/a> protections,\u201d the technical report states.<\/p>\n<p>Besides basic financial aspects, the CBDC \u201cshould support payments to and from the public sector and equity-advancing initiatives, such as the administration of social safety net programs,\u201d according to the report.<\/p>\n<p>It should also be able to incorporate technical provisions that prevent the use of the digital dollar \u201cin ways that violate civil or human rights,\u201d and maintain compatibility with environmental priorities \u201cincluding cutting U.S. greenhouse gas pollution by 50-52 percent from 2005 levels by 2030 and transitioning to a net-zero emissions economy by 2050.\u201d<\/p>\n<h2>Third Party Regulation<\/h2>\n<p>The report does not specify whether the CBDC should appropriate \u201ca third party\u201d to facilitate payments between a sender and receiver. If the CBDC were to adopt a third party regulator, it would go against decentralization\u2014one of the basic tenets and advantages of adopting cryptocurrencies.<\/p>\n<p>\u201cSome amount of peer-to-peer (P2P) transactions\u201d could be allowed, said the report. However, most of the transactions would occur \u201cwith the involvement of a financial intermediary.\u201d More intermediation could increase digital protections and \u201cadvance financial inclusion and equity.\u201d<\/p>\n<p>Unlike bitcoin, the CBDC would be largely regulated, and it would require permissions from governing parties. The central bank could also track purchases and restrict the user\u2019s access to the funds.<\/p>\n<p>Detractors of the CBDC claim that the currency can be made into a mechanism that is like the Social Credit Score system currently employed by the Chinese Communist Party (CCP) to regulate the Chinese citizens. Under the system, the CCP gets to decide what sorts of facilities are granted to the average citizen based on their compliance to authoritarian rules.<\/p>\n<p>According to recommendations, the CBDC system would be managed by \u201ca set of trusted entities\u201d or a network of system participants or a combination of the two.<\/p>\n<p>Transactions would be divided into different tiers based on privacy, financial inclusion, and other factors. When \u201clower\u201d tier users\u2014who provide less identity verification information\u2014make use of the system, they could be \u201csubject to transaction limits,\u201d unlike \u201chigher\u201d tier users.<\/p>\n<p>The transaction tier is decided on multiple factors including user accounts, amount being transacted, and counterparties involved. Lower tiers could make use of peer-to-peer transactions while higher tiers, involving larger sums of money, would need intermediaries.<\/p>\n<h2>Privacy Concerns<\/h2>\n<p>In March, three Republican senators put forward a bill to prohibit the Federal Reserve from issuing CBDC directly to individuals, warning that it could end up being <a href=\"https:\/\/www.theepochtimes.com\/no-us-federal-bank-should-issue-digital-currency-directly-to-citizens-republican-senators_4376758.html\">used as a financial surveillance tool<\/a>.<\/p>\n<p>In a press release, Sen. Ted Cruz (R-Texas), who introduced the bill, said that the federal government could either encourage innovation in the <a href=\"https:\/\/www.theepochtimes.com\/t-cryptocurrency\">cryptocurrency<\/a> space or end up devastating it.<\/p>\n<p>\u201cThis bill goes a long way in making sure big government doesn\u2019t attempt to centralize and control cryptocurrency so that it can continue to thrive and prosper in the United States,\u201d Cruz stated.<\/p>\n<p>Regarding identity-related information within transactions such as payment addresses, the report said that the data could be known by the central bank or intermediaries or could remain more private, based on the tier of the user.<\/p>\n<p>The report notes that \u201cidentity-related information known to the central bank for all or most transactions would represent a significant expansion of the central bank\u2019s access to customer information, which would raise significant privacy concerns.\u201d<\/p>\n<p>\u201cEven if policies exist to prevent this harm at this time \u2026 enabling this capacity could allow a future Administration to use the CBDC system to surveil the population in close detail, and cybersecurity compromise may still occur,\u201d the report states.<\/p>\n<p>On a Thursday call with reporters, Treasury Secretary Janet Yellen said the country <a href=\"https:\/\/www.voanews.com\/a\/us-treasury-recommends-exploring-creation-of-a-digital-dollar\/6750380.html\">needs to be prepared<\/a> to launch the CBDC if necessary.<\/p>\n<p>\u201cRight now, some aspects of our current payment system are too slow or too expensive,\u201d Yellen said.<\/p>\n<div class=\"author_wrapper\">\n<div class=\"one_author_block round\">\n<div class=\"top_row\">\n\t\t\t\t\t<a href=\"https:\/\/www.theepochtimes.com\/author-naveen-athrappully\"><\/a><\/p>\n<p>Follow<\/p>\n<\/div>\n<p>Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.\n<\/p>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Biden administration is \u201cclosely examining\u201d the possibilities for issuing a central bank digital currency (CBDC) based on a technical report prepared by the White House Office of Science and<\/p>\n","protected":false},"author":1,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1652574","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1652574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1652574"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1652574\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1652574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1652574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1652574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}