A U.S. CBDC Means Less Privacy for Americans, More Competition for Banks, End of Days for Crypto. (Tickers mentioned: JPM, BAC, WFC)

On Thursday Federal Reserve Chairman Jerome Powell made a statement about the Fed’s progress in exploring a U.S. CBDC (“Central Bank Digital Currency”, see the below video). Powell assured viewers that a U.S. CBDC would not replace physical U.S. Dollars. There are several key points to consider:

• User Privacy: A Fed-issued digital dollar will provide the Fed with real-time granular visibility into money flows (so much for user privacy). The public will have the opportunity to voice concerns when the Federal Reserve Board issues its U.S. CBDC white paper this summer which will seek public feedback.
• Fed Competing with Banks: It seems to us that a Fed-issued digital dollar will enable the Fed to deal directly with the public, circumventing depository institutions such as J.P. Morgan (JPM), Bank of America (BAC), Wells Fargo (WFC) and so forth.
• Is it Possible for a U.S. CBDC and Crypto-Currencies to Co-Exist? As we previously wrote, the Fed will marginalize if not outlaw crypto-currencies such as Bitcoin, Dogecoin and the like once it rolls out its U.S. CBDC if not in advance of a roll out.

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