NY Fed Reports “Successful” Months-Long Digital Dollar Test

The Federal Reserve Bank of New York’s Innovation Center has recently concluded a 12-week experiment in cahoots with banking behemoths such as Citigroup Inc. and Wells Fargo & Co. The study focused on regulated liability networks, with an aim to test the efficiency of digital dollars in the financial sector. Though the initial results showed some advantages in transaction speeds, critical questions regarding privacy and civil liberties remain glaringly unanswered and alarmingly relevant. The study, as reported by Bloomberg, employed a permissioned private blockchain to simulate the issuance and settlement of digital currency, representing customer deposits. The very use of a private blockchain rings alarm bells, as it could allow the central bank, and potentially other financial entities, to have an unprecedented level of control and surveillance over individual transactions. This could be a perilous road leading towards an Orwellian financial system where citizens are stripped of financial privacy. Per von Zelowitz, the director of the New York Innovation Center, seemed to gloss over these concerns in his statement emphasizing the functional benefits of central bank and commercial bank digital money operating together on a shared ledger. However, it raises the question – at what cost to individual privacy and freedom? The experiment found that digital dollars could streamline dollar-denominated payments and expedite settlement processes. However, what this conclusion conveniently omits is an examination of how this digitization could allow a dystopian degree of oversight and control over personal and business transactions. Tony McLaughlin from Citigroup talked about the “prospect…NY Fed Reports “Successful” Months-Long Digital Dollar Test