advocates who argue that such a CBDC could give the federal government vast new powers to micromanage citizens’ lives.
A CBDC is a form of digital currency that is issued by a central bank. In the case of the U.S., that would be the Fed. So, with a CBDC, consumers would be able use digital money issued directly by the Fed in addition to physical money like cash. Proponents argue that a centralized dollar would help prevent bank bailouts and increase efficiency.
Some Democrats, though, contend Emmer’s legislation could tie the Fed’s hands and hurt competition between the U.S. and other world powers. In 2022, the Federal Reserve Bank of New York and major banks announced the launch of a three-month test of a digital dollar that hoped to study its feasibility.