Federal Reserve Governor Michelle Bowman has raised valid concerns about the grave risks and privacy dangers that the introduction of a central bank digital currency (CBDC) might lead to in an appearance at a Harvard Law School Program on October 17.

The concept of a CBDC creation promises no certain benefit, remarks Bowman, but notably hints towards potential “unintended consequences” for the industry of finance.

Drawing from the contentions raised by one of the major participants in the regulation of domestic payments systems and banking, Governor Bowman underscored the trade-offs and risks that a digital dollar could entail. With the “considerable consumer privacy concerns” that a US CBDC implementation might entail, any plausible merits of such a currency, Bowman points out, remain largely elusive.

Notwithstanding the grand promises of hassle-free payment systems or greater financial inclusion, there appears to be a significant lack of persuasive proof that a CBDC would actually contribute to these ends or furnish public access to secure central bank money. Yet, the argument here is not for the halt of research on this subject; according to Bowen, a continuous study of a digital dollar’s technical abilities and potential risks linked with CBDCs could foster a progressive attitude towards such future developments.

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