• Former SEC official John Reed Stark believes that the establishment of a central bank digital currency (CBDC) is a bad idea and would open up a Pandora’s box of privacy and security concerns.
• He supports proposed legislation by Senator Ted Cruz which seeks to prohibit the Federal Reserve from creating a direct-to-consumer CBDC as it could be used as a financial surveillance tool.
• Stark believes that having a CBDC is not worth the associated costs and challenges.
Former SEC Official Opposes Central Bank Digital Currency
A former official of the U.S. Securities and Exchange Commission (SEC), John Reed Stark, has expressed his opposition to the establishment of a central bank digital currency (CBDC). He believes that this would open up a Pandora’s box of privacy and security concerns.
Proposed Legislation Seeks To Prohibit Federal Reserve From Creating Direct-To-Consumer CBDC
Senator Ted Cruz has proposed legislation which seeks to prohibit the Federal Reserve from creating a direct-to-consumer CBDC, as it could be used as a financial surveillance tool.
Risks Of A CBDC Remain Myriad
Stark says what the digital dollar would actually do is give rise to policy issues. “The risks of a CBDC remain myriad and raise a variety of important policy questions, including how a CIBC might affect financial-sector market structure, the cost and availability of credit, the safety and stability of the financial system and the efficacy of monetary policy.”
Having A CBDB Not Worth Associated Costs And Challenges
According to Stark, having a CBDB is not worth all associated costs and challenges.