Depending on who you ask, the idea of a digital dollar is either an essential step to keep up with China and Europe or a dangerous threat to civil liberties.
Skeptics like Rep. Tom Emmer warn that a retail CBDC would give the government a direct line into citizens’ wallets. He has championed the Anti-CBDC Surveillance State Act, which passed the House in July, arguing that programmable money without cash-like privacy would allow federal authorities to track or even restrict everyday transactions.
Policy specialists, however, argue that this framing ignores an important fact: CBDCs are not a one-size-fits-all product. Sheila Warren, who leads the Project Liberty Institute, points out that the U.S. Federal Reserve cannot launch a CBDC without congressional approval and that privacy features are design decisions, not inevitabilities. In her words, much of the rhetoric in Washington is “more about politics than genuine policy risk.”
While the U.S. debate drags on, other powers are moving ahead. China’s e-CNY is already live, while the European Union and India are piloting their own versions. That puts Washington at odds with much of the global policy landscape. Warren adds that wholesale CBDCs, which settle transactions between banks, may have potential in the U.S., but she has never seen a retail digital dollar as realistic.
One reason the CBDC conversation feels less urgent is the rapid rise of stablecoins. Congress recently passed the GENIUS Act, giving dollar-backed tokens a regulatory framework. Warren argues this could make CBDCs redundant, calling stablecoins the “jet fuel” of the digital economy as they power payments, trading, and settlement without a government-built alternative.
Ironically, while lawmakers frame CBDCs as an existential privacy danger, other risks are already here. Data-hungry corporations and AI platforms routinely collect and sell personal information. Warren cites examples like carmakers selling driver data, which she considers far more immediate and concerning than a CBDC that doesn’t yet exist.
The U.S. debate over digital currency has become a stage for broader political narratives about government power. Meanwhile, private stablecoins are filling the gap, and AI-driven surveillance capitalism grows unchecked. Whether a digital dollar ever materializes, the fight in Washington may reveal more about American politics than about the future of money.
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