EPIC Urges Federal Reserve to Prioritize Privacy If Designing a Central Bank Digital Currency
May 24, 2022
In comments on the Federal Reserve’s January 2022 discussion paper, “The U.S. Dollar in the Age of Digital Transformation,” EPIC urged the Fed to take a careful approach to designing and implementing a central bank digital currency (CBDC) that prioritizes privacy and does not repeat or exacerbate the privacy invasions in the current digital payments system. EPIC recommended that the Fed base a CBDC on the work of Advisory Board member David Chaum, who is widely recognized as the inventor of digital cash.
EPIC argued that a CBDC could improve financial privacy for individuals, but only if the system were designed to facilitate anonymous transactions equivalent to cash. Such a privacy-protective CBDC would require “close regulation and testing of the underlying protocols, systems, and devices and should be designed as a cash-like digital currency using a token-based system without a persistent digital ledger.”
EPIC regularly advocates for privacy and consumer protection in digital transactions. Recently, EPIC urged the Consumer Financial Protection Bureau to thoroughly investigate privacy invasions by big-tech platforms offering payment services.