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WSJ Letter - Digital Is Coming to Currency: The question is how it will be designed.

Sean Fieler is right to be concerned about privacy as we consider a U.S. central bank digital currency (“A Digital Dollar Would Empower the Fed, Not Americans,” op-ed, Feb. 8), but he fails to consider the troubling status quo if America doesn’t act to establish standards and safeguards for the future of money. Payments data is increasingly centralized in large databases maintained by commercial or government actors, which creates significant honey pots of sensitive information susceptible to surveillance and monitoring. Consider that Alipay and WeChat have more than two billion users transacting within their proprietary databases and that China’s digital yuan gives the government control over the ledger for its fiat currency.

Exploration of a U.S. digital dollar can force debate about the proper design of money to the forefront, and ensure that we don’t blindly succumb to increasingly centralized, scale-payments systems. To the contrary, a properly designed digital dollar can embed key privacy and legal protections, including through adoption of new privacy technologies, decentralization of access to payments information and explicit recognition of limits on governmental and commercial actors. With digital technology, the question of surveillance, privacy protection and other programmable features is a matter of policy and design choices.

When considering the future of money, we must soberly consider the inevitability of a move to digital. This unlocks a great opportunity to design and implement a future greenback that satisfies American privacy expectations, including Mr. Fieler’s.

Daniel Gorfine

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