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The Federal Reserve Bank of New York and a host of major banks announced Tuesday a pilot program for a "digital dollar," raising new concerns about the potential shift to a centralized digital currency.
What are the details?
The 12-week test will explore a digital money platform that "operates exclusively in U.S. dollars where commercial banks issue simulated digital money or 'tokens' — representing the deposits of their own customers — and settle through simulated central bank reserves on a shared multi-entity distributed ledger," a press release explained.
The Federal Reserve of New York emphasized the test will use only simulated data.
"It is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed," the bank said.
Nearly one dozen major financial institutions are participating in the program, including Citigroup, Wells Fargo, PNC Bank, HSBC, TD Bank, Truist Financial, U.S. Bank, Mastercard, and BNY Mellon.
What was the reaction?
The announcement triggered concerns that the U.S. may be heading toward adopting a centralized digital currency that would give the government increased control over Americans' finances or perhaps even result in the adoption of a social credit system.
Critics panned the announcement:
- "Decentralize money. No digital dollar. A digital U.S. currency would be one of the most dangerous developments in history. When government can simply flip a switch to block all your transactions, it controls your entire life. We need a wall of separation between money and state," former Rep. Justin Amash said.
- "Government controlled digital currency is critical to the future the global elite are building. They want to trace everything you do, control you and deny you funds based on a social credit system where they can steal your money for opposing their narratives or questioning them," another person said.
- "It begins," Edward Snowden reacted.
- "[D]oes everyone feel that? that is your money and freedom slipping away from you," another person reacted.
- "Cash is about to become extinct. Total control. 1984. Orwell," one person predicted.
- "Say Goodbye to freedom. Food tickets based on your social credit are coming," another person predicted.
The New York Federal Reserve said it will publish a report about the test once it is completed.
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Chris Enloe is a staff writer for Blaze News