The Club For Growth Condemns CBDC Encourages Bitcoin Adoption – Bitcoin Magazine
A conservative advocacy group known as The Club For Growth (CFG) has published a policy brief entitled: The case against a digital currency from the US central bankper a briefing sent to Bitcoin Magazine.
The brief begins by describing the innovation that is Bitcoin by exploring its immutability, decentralization, speed, trustless operation and its ability to disrupt by disintermediating the world of commerce and banking. The report then goes back to a report published by the Federal Reserve that discussed the possibilities of future implementations of a central bank digital currency (CBDC) in the United States. In summary, The Club For Growth says:
“CBDCs appear to be a solution in search of a problem. There is no obvious market failure that CBDCs are correcting.”
The advocacy group spends a lot of time explaining many of the shortcomings that could result in financial freefall, should the Federal Reserve issue a CBDC. Among these deterrents is the strong possibility of destabilizing the current banking industry by displacing services.
“A CBDC would put the Federal Reserve in direct competition with private, commercial banks for depositors,” the CFG letter said.
In fact, this particular concern was made clear by the Federal Reserve itself in the aforementioned briefing issued by the central bank.
“The CBDC will differ from existing digital money available to the general public because a CBDC will be the responsibility of the Federal Reserve, not a commercial bank,” the Federal Reserve’s report said.
Furthermore, the advocacy group also examines the likelihood of a central bank failing to bypass zero lower interest rates for improved countercyclical monetary policy, and the burden that could be placed on the public by removing access to physical currency. In addition, CFG’s report explains how CBDCs are not an inherent solution to the issue of transaction speed, nor is banking the unbanked.
Furthermore, the CFG noted concerns regarding the loss of anonymity offered by the use of cash or bitcoin due to central ledgers requiring identity-verifying information, and other issues related to the use of a CBDC.
“Furthermore, while it is possible to imagine a CBDC designed to provide some level of privacy and anonymity, it is also possible to imagine dystopian scenarios where the digitization of almost every part of one’s life is accessible to the central bank and/or the government”, says the lawyer’s letter.
Finally, the CFC concluded its report by explaining that a CBDC fails to deliver on any of the claims made by proponents of the idea, while also violating the principles of limited government and free markets.
“If a CBDC is the answer, what’s the question?” ask the brief at the end.
