EPIC Urges Federal Reserve to Prioritize Privacy If Designing a Central Bank Digital Currency

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.