The Fed issuing digital currency will turn crypto into a tool of the state-CEI Sr fellow John Berlau

As cryptocurrencies have proliferated in the private sector, central banks are now contemplating getting into the game. Venezuela tried unsuccessfully to popularize its currency with the digital petro. China may be more successful with its plan to digitize the yuan. Now, some are saying the U.S. Federal Reserve should issue its own cryptocurrency, with names like “Fedcoin” and the “digital dollar.” Most proposals for this national cryptocurrency also include direct consumer deposit accounts with the Fed.

The Fed already plans to compete with private-sector payments system with its FedNow real-time payments system. Proponents give various reasons why the Fed should issue digital currency, from protecting the dollar competition with China to relieving the poor from high bank fees. But opponents cite multiple problems such a system would have from privacy concerns with the Fed having direct access to consumer spending data, to enabling currency manipulation, to crowding out innovation from private cryptocurrencies and payment systems.

John Berlau, Senior Fellow at the Competitive and author of the new Amazon bestseller — “George Washington, Entrepreneur” — will make the case against Fedcoin.