There’s No Such Thing As An ‘American-Style’ Central Bank Digital Currency

TL;DR:

CBDCs have faced criticism for enabling authoritarian governments to control citizens, despite some American financial regulation figures advocating for an "American-style" CBDC. CBDCs give governments visibility into and control over all economic transactions, with examples like China's e-CNY allowing the government to surveil and censor transactions. Some Republicans also support CBDCs, suggesting that an American CBDC could avoid surveillance issues by limiting itself to wholesale transactions between the Federal Reserve and depository institutions.

However, critics argue that these protections are insufficient, and that stablecoins offer a superior solution to CBDCs. They propose that the U.S. government bring stablecoins into the existing regulatory framework for money-market mutual funds to ensure a more secure and privacy-conscious alternative to CBDCs. Legislation has been introduced to limit or ban the issuance of CBDCs in the U.S., while aligning stablecoin regulation with that of money-market mutual funds. The U.S. can potentially outperform China in digital assets by focusing on dollar-denominated stablecoins with built-in privacy protections.