Michelle Bowman, a senior official of the US Federal Reserve, is worried about a digital currency that citizens will also use.
Bowman thinks that if the digital dollar is used by individuals, harms than benefits can come to the fore.
The FED official said the following about the CBDC project at an event organized by a university:
"A digital currency that is suitable for use in interbank or wholesale trade may have undesirable consequences for individuals."
Bowman emphasized that an individual-focused digital dollar can inevitably have a negative impact on consumer privacy. The official stated that the traditional financial system will face great risks if individuals withdraw their deposits on the banking system.
Is Digital Currency a Threat to Privacy?
Digital currencies developed by states continue to be the subject of discussion all over the world. In the USA, those close to the Republican wing believe that the digital dollar will threaten their individual privacy. According to opponents, the government will have the opportunity to transfer wealth thanks to the virtualization of money.
Republican Florida governor Ronald DeSantis recently announced that he has banned the digital dollar in his state.