The United States should lead the development of Central Bank Digital Currencies (CBDCs) away from being “surveillance coins” and towards being “freedom coins,” says the former chair of the Commodity Futures Trading Commission (CFTC).
In a Mar. 13 op-ed in The Hill, Christopher Giancarlo, nicknamed “Crypto Dad” for his pro-crypto outlook, said the U.S. “must influence” CBDC development towards protecting “democratic values like freedom of speech and the right to privacy, ” leveraging current technology used by some cryptocurrency protocols.
My op-ed in @theHIll with @Jim Harper: the question is not whether #CBDCs can be stopped (they can’t), but whether sovereign AND non-sovereign #digitalcurrency will enslave or liberate citizens of free societies. https://t.co/h1oT14NalK
— Chris Giancarlo (@giancarloMKTS) March 13, 2023
Giancarlo, the co-founder of the Digital Dollar Project that focuses on researching the implications of a U.S. CBDC, elaborated on the privacy considerations in a Mar. 1 report he co-authored for the policy think tank, the American Enterprise Institute (API) with API fellow Jim Harper.
He said the U.S. must advocate for a “freedom coin” — a CBDC that guarantees a high level of privacy.
Giancarlo and Harper argued in the paper that CBDCs offer an opportunity “to reassess contemporary financial surveillance activities” and could possibly enhance constitutional protections.
To achieve this, a CBDC could take advantage of crypto technology, such as “zero-knowledge proofs, homomorphic encryption, and multiparty computation, that enable parties to prove an encrypted proposition is true without revealing the underlying information,” they said.
My report today w/@AEI’s @JimHarper: #CBDC & #stablecoins must preserve privacy & security, economic liberty, free speech & personal autonomy. https://t.co/pB8uaA3KIT
— Chris Giancarlo (@giancarloMKTS) February 28, 2023
These technologies would make “intelligent enforcement” of crime prevention possible, the authors argued.
First, the U.S. would have to reexamine current financial surveillance policies. The authors took issue specifically with one recent document published by the administration of U.S. President Joe Biden:
“The White House Office of Science and Technology Policy’s (OSTP) recent Technical Evaluation for a U.S. Central Bank Digital Currency System shows that financial surveillance in the West is more like China’s than many would like to admit.”
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