(by John Jiang | The American Spectator) – The Fed plays a hitherto unprecedented role in the U.S. economy. Growth in the money stock, which had until 2020 remained in the single digits annually, has soared by a remarkable 40 percent since the beginning of the pandemic.
Yet the power that it has now accrued over the financial well-being of Americans would pale in comparison to the power that it would command under a Central Bank Digital Currency (CBDC) program, an idea that is now openly discussed by some of the most powerful people in government.
Such a program, which would turn the American dollar into a purely digital currency controlled, issued, and regulated by the Fed using blockchain technology, would be the largest restructuring of the U.S. financial system since the end of the gold standard.
American leaders were no doubt watching closely when China became the first major economy to launch a CBDC — the digital yuan — in mid-2020. The currency is still in an early testing phase, with a reported user base of 231 million but accounting for less than 0.1 percentof total spending. Nonetheless, the Chinese government has been aggressively promoting its adoption, including during the recent Winter Olympics.
Now Janet Yellen, secretary of the treasury under the Biden administration and former chair of the Federal Reserve, is among those who believe that the Fed must update America’s monetary system by issuing its own CBDC.
A centralized, permissioned digital currency would give an organ of the federal government unfettered access to the financial lives of every American.
In a speech delivered at American University in April, Yellen emphasized that creating a digital currency would require “years of development, not months,” but she suggested that such development was already in the works. She stated that both she and President Biden shared the same “urgency” in “pulling forward research to understand the challenges and opportunities a CBDC could present to American interests.” Read Full Article >