Amidst the current cryptocurrency craze, Biden has ordered federal agencies to research the advantages and disadvantages of a digital dollar. A digital dollar would be extremely risky and worrying, as it would put the government in direct control of every American’s wallet.

From The Hill. On March 9, the Biden administration released an executive order (EO) instructing a long list of federal agencies to study digital assets and to propose numerous reports about their use and proposals to regulate them….

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But there is an even more important part of the EO: President Biden has instructed the federal government and Federal Reserve to lay the groundwork for a potential new U.S. currency, a digital dollar….

The order further directs the Treasury Department, Office of the Attorney General and Federal Reserve to work together to produce a “legislative proposal” to create a digital currency within 210 days, about seven months….

It is important to understand that the digital dollar would not be similar to cryptocurrencies like bitcoin. Cryptocurrencies operate on blockchain technology, which is decentralized by design. No group or individual can truly control cryptocurrencies once they are launched.

Digital dollars, on the other hand, would be traceable and programmable. The Federal Reserve (or some other designated entity) would have the ability to create more digital dollars whenever it sees fit, and, depending on how the legislation is written setting up the currency, the dollars could be formulated to have various rules and restrictions built into their design.

For example, a digital dollar could be crafted to restrict fossil-fuel use, to give bonuses to people for spending at particular businesses, to enact de facto price controls by disallowing users from spending too much on particular products, or even to redistribute wealth.

In one report about the development of a central bank digital currency published by the Federal Reserve in January, the Fed outlined a few examples of possible “design choices” for a digital dollar, including that “a central bank might limit the amount of CBDC an end user could hold….”

Biden’s executive order states that the CBDC and other policies governing digital assets must mitigate “climate change and pollution” and promote “financial inclusion and equity….”

Even more stunning, in a 2021 question-and-answer session about the development of a digital dollar, David Andolfatto, a senior vice president and economist in the St. Louis Fed’s Research Division, was asked whether the Fed could “assure us [the public] that these digital currencies won’t ever be used to tell us when, how or where our money can be spent?”

“In life one can’t give absolute assurances of anything,” Andolfatto responded before suggesting that “the best we can hope for” is for Congress to “respond to the electorate’s concerns” about privacy….

How do you feel about a potential digital dollar? Share your thoughts and prayers below.

(Excerpt from The Hill. Photo Credit: André François McKenzie on Unsplash)