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Government The Almighty Buck United States

The US Treasury Recommends Exploring Creation of a 'Digital Dollar' (usnews.com) 168

Some news Friday from the Associated Press. "The Biden administration is moving one step closer to developing a central bank digital currency, known as the digital dollar, saying it would help reinforce the U.S. role as a leader in the world financial system." The White House said on Friday that after President Joe Biden issued an executive order in March calling on a variety of agencies to look at ways to regulate digital assets, the agencies came up with nine reports, covering cryptocurrency impacts on financial markets, the environment, innovation and other elements of the economic system.

Treasury Secretary Janet Yellen said one Treasury recommendation is that the U.S. "advance policy and technical work on a potential central bank digital currency, or CBDC, so that the United States is prepared if CBDC is determined to be in the national interest.... Right now, some aspects of our current payment system are too slow or too expensive," Yellen said on a Thursday call with reporters laying out some of the findings of the reports....

According to the Atlantic Council nonpartisan think tank, 105 countries representing more than 95% of global gross domestic product already are exploring or have created a central bank digital currency. The council found that the U.S. and the U.K. are far behind in creating a digital dollar or its equivalent.... Several [U.S. agency] reports will come out in the next weeks and months.

Eswar Prasad, a trade professor at Cornell who studies the digitization of currencies, said Treasury's report "takes a positive view about how a digital dollar might play a useful role in increasing payment options for individuals and businesses" while acknowledging the risks of its development. He said the report sets the stage for the creation of agency regulations and legislation "that can improve the benefit-risk tradeoff associated with cryptocurrencies and related technologies."

A statement from the U.S. White House cautions that the report does not make any decisions "regarding particular design choices for a potential U.S. CBDC system." Instead, the 58-page document analyzes 18 different choices for technical designs, and according to its introductory paragraph, "makes recommendations on how to prepare the U.S. Government for a U.S. CBDC system."

But "it does no make an assessment or recommendation about whether a U.S. CBDC system should be pursued."
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The US Treasury Recommends Exploring Creation of a 'Digital Dollar'

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  • The US Treasury (Score:3, Informative)

    by skrugen ( 229044 ) on Sunday September 18, 2022 @11:30PM (#62893675)

    The US Treasury and The Federal Reserve are separate entities.

    The Reserve has a Board of Directors and acts as a corporation with its own interests under a charter from the US government

    If and when the "digital dollar" meets with the needs of the Reserve, sure it might have some standing and backing

    Until then I would hedge my bets

  • by oldgraybeard ( 2939809 ) on Sunday September 18, 2022 @11:33PM (#62893679)
    It's time to leave.
    • True... true...

    • Yeah, I've been to Blackhat conferences too...

    • Nah, they have some of the best parties! Seriously, I've been to some (unofficial) govt parties & they're great. Not in the USA though. I doubt those'd be any fun at all.
    • Yah, I really hate that cash stuff. I wish we were still in the era where you had to use notes from private banks and worry about whether the notes you had/accepted would be honored and businesses had to guess at whether some note made by a minor bank in some backwater was genuine or forgery despite having never seen it before.

      The government may be bad at lots of stuff, but you have to admit that providing physical currency is a pretty strong competency of governments. We'll have to see about digital curr

  • Ya, but ... (Score:5, Interesting)

    by fahrbot-bot ( 874524 ) on Sunday September 18, 2022 @11:40PM (#62893697)

    From TFA:

    The Blockchain Association, which lobbies lawmakers on Capitol Hill, said in a statement that the White House reports are “a missed opportunity to cement U.S. crypto leadership.”

    “These reports focus on risks — not opportunities,” the statement reads, "and omit substantive recommendations on how the United States can promote its burgeoning crypto industry, including job creation, improvements to the financial system, and expanded access for all Americans.”

    It seems like many (most?) Blockchain "advocates" focus on opportunities and not risks. It may not matter to them, but it seems like it would be a good idea for no (or very little) risk to be involved in using a digital currency liable directly to the Fed (from TFA):

    Central bank digital currencies differ from existing digital money available to the general public, such as the balance in a bank account, because they would be a direct liability of the Federal Reserve, not a commercial bank.

  • by swell ( 195815 ) <jabberwock@poetic.com> on Sunday September 18, 2022 @11:49PM (#62893713)

    It's likely that 95% or more of dollar transactions are already digital transfers. Whether payment for a coffee or a massive bank to bank transfer across the globe. How does a 'digital dollar' improve either of those situations?

    I enjoy the privacy of cash when I buy coffee. I will not be happy to be tracked by 'digital dollars' every time I make a minor purchase. And some times I use cash for major items which I don't want shared with trackers, advertisers or governments.

    • Re: (Score:3, Insightful)

      by pollarda ( 632730 )
      They are wanting to create a programmable currency. So for example you could have $1,000 in your account. However, $450 of it can only be used to purchase food and an additional $375 will expire next Tuesday. The remaining $125 can be spent only in businesses with a social credit score of over 700. Additionally any purchase you make will be logged and will affect your social credit score and you may receive health recommendations based on the foods and other items you purchase. If they don’t like
      • In what way is your weird nightmare scenario not totally possible with a charge card or other account?

        All without some inefficient, weird-ass, distributed fuckwittery.

        Fuck crypto. Fuck crypto bros. A bullet receptor is all they're good for. Preferably .22 to save money.

        • In what way is your weird nightmare scenario not totally possible with a charge card or other account?

          CC is ripe for abuse too, but not quite as much since it is held by private companies.

          Cash, is your best friend to help stem abuse of this sort. Physical cash.

      • and you put the small bodega out of business as they don't have the funds that wallmart has to program there systems to keep up with that tracking system.

      • This has nothing to do with the proposal. It's about letting people have bank accounts *directly* with the fed (well maybe intermediated by a bank but you would have a direct claim on money in a fed account) rather than merely FDIC insured. Basically, it lets regular people take advantage of the lower risks involved with having your account balance backed directly by the federal reserve.

    • The key here is that you can be targeted really easily with an all digital currency.

      You couldn't even escape because you could be denied payment service on gas stations within 500 Km of the border.

    • It's likely that 95% or more of dollar transactions are already digital transfers. Whether payment for a coffee or a massive bank to bank transfer across the globe. How does a 'digital dollar' improve either of those situations?

      It doesn't, but improve won't be the goal when the House of Cards known as the USD falls.

      You will then understand that replace is the goal here. That, and being able to track (and tax) every fucking transaction.

      I enjoy the privacy of cash when I buy coffee. I will not be happy to be tracked by 'digital dollars' every time I make a minor purchase. And some times I use cash for major items which I don't want shared with trackers, advertisers or governments.

      You enjoy privacy? Good for you. Too bad your Government likes to assume you're some kind of domestic terrorist for carrying cash and bucking their new Think-Of-The-Children financial system.

      As far as "major items" go, well let's just say there will soon be 80,000 bored new IRS agents who won't s

      • It's naive to imagine that the feds aren't already tapped into every major payment processor just like they're tied into everything else. They already know what you're buying, from whom, and when, unless you're using cash and the transaction wasn't mediated online (or if it was, you took much greater pains to remains secure than most people will.) Every phone call through a major carrier, every internet session passing through a backbone, every credit card purchase and every email is surely at least event l

        • It's naive to imagine that the feds aren't already tapped into every major payment processor just like they're tied into everything else. They already know what you're buying, from whom, and when, unless you're using cash and the transaction wasn't mediated online (or if it was, you took much greater pains to remains secure than most people will.)

          Not sure what's worse...

          Arguing it's naive not to assume something for which you have no evidence?
          Excusing behavior by enumerating who else is doing it?

          • Arguing it's naive not to assume something for which you have no evidence?

            What? Who told you there's no evidence of these programs? Someone who wanted you to believe that Snowden and Winner are traitors for telling us we're being spied upon, no doubt.

        • It's naive to imagine that the feds aren't already tapped into every major payment processor just like they're tied into everything else. They already know what you're buying, from whom, and when, unless you're using cash...

          Uh, exactly.

          No, they do not know what you're buying, because cash. They do not know what the stripper or the bartender is earning, because cash. They do not know where you're surfing, because VPN. And a few million transactions in the US going on every hour? I'd love to know what secret underground bunker is full of 250,000 adult monkeys pouring over transaction logs and reports to enable "every credit card purchase" fears. (Perhaps that's the new wing of the IRS).

          Logging is cheap and easy. DOING so

          • They do not know where you're surfing, because VPN.

            Surfing? Does VPN stand for "virtual private neoprene"?

          • Creating a digital dollar doesn't automatically eliminate the private credit card, or cash. That's the real fear, only they could do that even without creating a digital dollar... just use the existing payment systems and outlaw paper money. So what if it costs you money? They'll just take taxes from the poor and middle class to subsidize it, and call it free.

    • by mjwx ( 966435 ) on Monday September 19, 2022 @08:33AM (#62894531)

      It's likely that 95% or more of dollar transactions are already digital transfers. Whether payment for a coffee or a massive bank to bank transfer across the globe. How does a 'digital dollar' improve either of those situations?

      I enjoy the privacy of cash when I buy coffee. I will not be happy to be tracked by 'digital dollars' every time I make a minor purchase. And some times I use cash for major items which I don't want shared with trackers, advertisers or governments.

      Wouldn't it essentially be a different payment network than using Visa/MC/et al. The benefit being mainly to the merchant who will pay far lower fees.

      This is why it'll never happen in the US, that monopoly is too well protected.

      • But the money that someone uses to pay for something has to come from their bank account. Isn't that what bank-specific payment systems like Zelle are for? They cut out the middleman of credit/debit card companies.
    • It's likely that 95% or more of dollar transactions are already digital transfers. Whether payment for a coffee or a massive bank to bank transfer across the globe. How does a 'digital dollar' improve either of those situations?

      Reduced liability and transaction costs.

      I enjoy the privacy of cash when I buy coffee. I will not be happy to be tracked by 'digital dollars' every time I make a minor purchase. And some times I use cash for major items which I don't want shared with trackers, advertisers or governments.

      This is the issue when people talk about CBDC. The actual implementation not the idea itself is everything. Does CBDC imply replacement of cash? Does it require centralized identification of end parties and tracking of all transactions to individuals, just facilitating banks? Neither? Does it give the government new capabilities to go after people it doesn't like?

      Will the government initially pretend to care with reasonable initial implementation and then change t

    • I enjoy the privacy of cash when I buy coffee. I will not be happy to be tracked by 'digital dollars' every time I make a minor purchase. And some times I use cash for major items which I don't want shared with trackers, advertisers or governments.

      Exactly this. Government-backed digital currencies will only hasten the demise of cash that began way-back-when with credit cards.

      When cash disappears we are all vulnerable - not only to tracking and spying, but to being effectively rendered penniless even though we theoretically have money. Having the Feds or law enforcement freeze your access - possibly just because they've mistaken you for somebody else or they just don't like something you said - will be more devastating when you can't have a stash of c

    • e.g. for people who can't get bank accounts and/or credit cards due to one reason or another. There's a ton of predatory services that cater to them. A few companies have tried to make less predatory ones but they can't compete with the more aggressive predators and drop out.

      This is a back door into what the kiddies call "Postal Banking". As such, it'll most likely go nowhere as it threatens the profits made by the aforementioned predatory services.

      On a side note, "unbanked" is now a sufficiently c
  • Fort Knox (Score:3, Interesting)

    by skrugen ( 229044 ) on Sunday September 18, 2022 @11:52PM (#62893717)

    We planned the heist for years, broke into Fort Knox fully equipped to haul out tons of gold but there was nothing but ones and zeros in the vaults

    • by quenda ( 644621 ) on Monday September 19, 2022 @01:53AM (#62893939)

      We planned the heist for years, broke into Fort Knox fully equipped to haul out tons of gold but there was nothing but ones and zeros in the vaults

      I hope you just took ones. The zeros are worthless.

    • All the gold in California is in a bank in the middle of Beverly Hills, in somebody else's name.
      • by GoTeam ( 5042081 )

        All the gold in California is in a bank in the middle of Beverly Hills, in somebody else's name.

        Albert Brooks?

  • by The Evil Atheist ( 2484676 ) on Sunday September 18, 2022 @11:54PM (#62893721)
    Your problem is that your fucking shambles of a country refuses to work together for anything because cooperation is communist.

    Every other first world country has internet banking that works fast. Tap-on works everywhere. Payments are instantaneous.

    Regulate and punish banks that refuse to modernize and work for their customers.
    • by LeeLynx ( 6219816 ) on Monday September 19, 2022 @12:53AM (#62893815)
      As great as it would be to perfect the panopticon, I think we should probably pass. That's not really fear of communism or cooperation on my part, or whatever bullshit reductive explanation makes you feel superior. It's an acknowledgment that an awful lot of other 'first world' countries that are in so much less of a 'shambles' are hobbling toward fascism at a pace alarming similar to our own, and all that additional centralization just makes that journey far more likely to reach its endpoint. I realize that as far as anyone outside the US is concerned, this is where racism was invented, and their country is a left-wing haven of progressive thought; I can only assume that the their explosion in far right electoral success and straight-up anti-immigration riots are different because, you know, Europe is just better. Privacy isn't convenient. There are many, many oppressed people in not-so-first-world nations who would love to have that inconvenience right now. I'm not sure I'm ready to throw it away to shave 3.2 seconds off the average purchase time of a goddamn latte.
      • by mjwx ( 966435 )

        As great as it would be to perfect the panopticon, I think we should probably pass. That's not really fear of communism or cooperation on my part, or whatever bullshit reductive explanation makes you feel superior. It's an acknowledgment that an awful lot of other 'first world' countries that are in so much less of a 'shambles' are hobbling toward fascism at a pace alarming similar to our own, and all that additional centralization just makes that journey far more likely to reach its endpoint. I realize that as far as anyone outside the US is concerned, this is where racism was invented, and their country is a left-wing haven of progressive thought; I can only assume that the their explosion in far right electoral success and straight-up anti-immigration riots are different because, you know, Europe is just better.

        That is one very elaborate fantasy to avoid admitting that the banking system in the US is an utter shit show.

        When it comes to marching towards fascism, it isn't Europe that has a huge cult around a disgraced criminal who are now literally giving him nazi salutes and threatening violence if a legitimate election isn't overturned (as well as money, given he's a "business genius", why does he need to beg for their cash).

    • Every other first world country has internet banking that works fast. Tap-on works everywhere. Payments are instantaneous.

      I lived in the US for a couple of years, and coming from IBAN, dealing with the baking system there was a horrific experience.

      I still don't know why it's impossible to just transfer money to someone else's account without jumping through 17 hoops. Or why everyone just expects transactions to happen via cheque.

    • by leonbev ( 111395 )

      What are you talking about? I'm assuming that you're talking about the US, which has had contactless payment systems like Apple Pay and Google Pay for years now. Almost every business (even the mobile ones like food trucks) has these now, and we're quickly getting to the point there carrying cash is no longer necessary unless you're going to a privately hosted tag sale.

      • ...we're quickly getting to the point there carrying cash is no longer necessary unless you're going to a privately hosted tag sale.

        You can't be FROM the US yourself...?

        What the hell is a "tag sale"...? Is there a difference between an privately held one, vs what I assume could also be a publicly held "tag sales"?

        That just is not an American term and I have no idea WTF you are refering to....please define.

        • I've had the (mis)fortune of living in every single major region of the US.

          It is an American term. It's used in New England.
          A privately hosted tag sale is one that occurs on your driveway vs. a hosted event at a local community center which likely has some kind of contracted merchant services.
          • A privately hosted tag sale is one that occurs on your driveway

            Are you talking about a garage sale or yard sale then...?

            I swear, I've never heard of a "tag-sale" before in my life till this thread.

            Interesting...I guess those folks up in the NE have a different language. I dated a girl from up there awhile and ran into a few other colloquialisms I'd never heard before, but never the tag sale thing.

            I've lived out west and mostly the south east, never up north or north east....

            Oh well, what a great count

            • Are you talking about a garage sale or yard sale then...?

              Ya

              I swear, I've never heard of a "tag-sale" before in my life till this thread.

              I've never heard it used outside of New England.

              Interesting...I guess those folks up in the NE have a different language.

              They absolutely do, lol

      • I haven't carried cash in 15 years.
        I live in Seattle, so we're a little ahead of the curve on those things, though.
    • You mean that shambles of a country whose defense support is the main reason Russia hasn't run roughshod over half of Europe? And before that the reason the whole continent didn't become part of Nazi Germany? That country?

  • It is all numbers in computers at this point, what are they trying to solve?

    Want to be really innovative - go back to basing the dollar on something tangible.

    -politicians now falling for the cryptocurrency hype, now we're all screwed
    • We want "cash" transactions that are traceable so we can control your bitchass.

    • +1. Was just about to comment the same.

      The US dollar is, today, mostly digital. I recall reading figures of cash being used only for ~19% of all USD transactions, back in 2020.

    • It is all numbers in computers at this point, what are they trying to solve?

      Actually, cash bank notes aren't numbers in computers - that's what makes them special. Your funds deposited in the bank's computer are nothing more than 'loans' you made to the bank that they promise to repay. At many points in history (Iceland, Greece, Lebanon etc etc) the bank hasn't been able to repay your money when you wanted it too. That does not apply to cash you have under your mattress, and is one of the things that makes real physical cash special.

      The idea behind a govt issued digital currency is

    • This has nothing to do with innovation or transaction times. It's really all about taxes and control. A huge portion of the economy takes place in all-cash and is not poorly or not at all. A digital dollar would allow the government to eventually phase out hard currency and get to much higher levels of tax collection.

      Of course, the people hurt the most from this change will be the poor and small businesses, as they are the ones who tend to use cash. The rich already are all-digital.

  • by Rosco P. Coltrane ( 209368 ) on Monday September 19, 2022 @12:52AM (#62893813)

    Whether it's dollars or any other currency. Money is nothing but numbers in computers these days. When you pay someone, your own counter goes down and the counter of whoever you pay goes up the same amount, with a bunch of greedy banks in the middle controlling the process. Cash still exists, but governments and said banks want its skin bad.

    What I describe above is "centralized digital money". If that's what the Biden administration wants, well good news: it's already there. If they mean a decentralized cryptocurrency style of bullshit money that is backed and controlled by the US, then that makes no sense at all, since decentralized isn't supposed to be controllable by anybody.

  • by cygnusvis ( 6168614 ) on Monday September 19, 2022 @02:52AM (#62894055)
    There are so many tax benefits for the government Iâ(TM)m sure this will happen
  • by GotNoRice ( 7207988 ) on Monday September 19, 2022 @04:28AM (#62894201)
    A Digital Dollar would make it possible to track literally every transaction. So on a basic level, should people have the ability to conduct a private transaction or not? This is the freedom that is at stake now. Otherwise we're talking about paying tax when you buy something from your neighbor's garage sale, paying more for your health insurance if spend too much on much fast food, immediate referral to DEA if you buy something from a known drug dealer, etc. Some of that might sound far-fetched on the surface but it wasn't long ago when the idea of being taxed when buying or selling used items on eBay was also far fetched.
    • Re: (Score:2, Insightful)

      by phoenix321 ( 734987 )

      It's all that and MUCH worse.

      A digital dollar means the government and all it's ministries get full access and knowledge of every purchase made and the ability to put all of these under their political whims. So in fact, the government can then track all spending and cancel every purchase, if it deems them to be wrong - and what is "wrong" can depend on every single piece of political ideology there is.

      It means the government can prevent you to buy merchandise for the opposition candidate. It means the then

  • It's not clear to me if the US is looking at digital currency, or creating a centralized bank. The last couple papers I read from Yellen seem to be more like creating a central clearinghouse for all citizens, direct central banking. You can see how well this will work. "I'm from the government. I'm here to help."
  • They will never admit this publicly, but they're terrified that the US dollar may lose its reserve currency status if they do nothing to increase its appeal. They're in a bind; if they print fewer of them, to increase their purchasing power, then we would enter a depression and there would be mass defaults on loans across all sectors and asset classes, including on U.S. treasuries. If the Fed stays on its current track of endless quantitative easing and interest rates below the real rate of inflation, the
  • Frankly I'm of the generation who would rather use a printer from 2005--and keep a loaded shotgun next to it in case it starts making any weird noises.

    Meaning while I build software--and have built my own share of mobile apps, desktop apps, and server apps, both by myself and in various teams for various purposes--I know what goes into them. And I'd rather have a mechanical thermostat and a car with mechanical ignition timing, because frankly I know the crappy quality of the software that is being used to b

  • JFK issued "Executive Order 11110" on June 4 1963 to strip the Federal Reserve of the authority to charge interest on money loaned to the US government. One theory is they killed him for that reason, because money-printing is slavery and nobody likes to lose their slaves.

    It wasn't a new idea. Abraham Lincoln said:

    "The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these p

  • I don't recall sending wads of cash to and from my bank recently. Seems like all my dollars already are digital.

  • Missing the point (Score:5, Interesting)

    by logicnazi ( 169418 ) <gerdes&invariant,org> on Monday September 19, 2022 @11:50AM (#62895091) Homepage

    It feels like calling this a "digital dollar" has confused many people. The real meat of the proposal is a shift from only allowing large banks to have deposits with the fed to allowing everyday citizens to have accounts with the fed. In an ideal implementation, this would mean that everyone in the US had access to a free account with the federal reserve solving the problems of unbanked individuals, scammy overdraft fees etc.. etc..

    I mean why should you have to put your money in some random bank when the federal reserve lets big banks directly deposit with it? And this has the advantage of letting everyday citizens take advantage of the lower risk (yes FDIC insurance is nice but a bank failure can tie up your money for quite awhile and it only protects 250k) and convenience that the fed already offers to large banks.

    Of course, I wouldn't be surprised if the final proposal ends up only allowing citizens to have accounts indirectly (e.g. the fed has your money but you have to access it via bofa, citibank etc..). But it's still an improvement over the situation today.

    ---

    As an aside, it would be an interesting reversal for the fed. There's a bunch of economists and investors who have been trying to launch a bank for some time that simply takes all customer deposits and sticks them in the bank's fed account. The fed has thrown up roadblocks and kept them from doing this.

  • Digital absolutely means transactions are digital and algorithm controlled. Kind of Skynet for money

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