As China accelerates deployment of its digital yuan, and the European Central Bank advances toward a digital euro, the Republican Party is seeking to prevent the creation of a Central Bank Digital Currency (CBDC) in the United States. Their insistence on clinging to an increasingly obsolete financial infrastructure means that Americans will continue to be saddled with billions in unnecessary fees every year and that corporations will be empowered to erode our privacy in Orwellian fashion. What’s more, handicapping ourselves in this way will only make it more likely that the dollar’s dominance in global finance will come to a premature end. America needs a digital dollar, and we need it now.
The Trump administration’s recent digital assets report explicitly prohibits federal agencies from establishing or promoting CBDCs, arguing they “threaten the stability of the financial system, individual privacy, and the sovereignty of the United States.” This position reflects a fundamental misunderstanding of how digital currencies actually work—and ignores the privacy advantages they could provide over our current system.
Consider this analogy: when you send a package through the United States Postal Service, the Fourth Amendment protects its contents from unreasonable government search. That same package sent via FedEx or UPS enjoys no such constitutional protection. Similarly, a government-issued digital currency would operate under constitutional constraints and democratic oversight that private payment systems simply don’t face. As such, a government run service inherently offers more privacy protection than its privately run counterpart.
Today, every swipe of your credit card, every electronic transfer, and every digital payment flows through private corporations that collect, analyze, and monetize your financial data. Banks routinely share transaction information with third parties, build detailed consumer profiles, and sell insights about your spending habits. In contrast, a properly designed CBDC could implement strong privacy protections by design, limiting data collection to only what’s necessary for monetary policy and financial crime prevention.
The economic benefits of a digital dollar are even more compelling. Americans currently pay $5-10 billion annually in overdraft fees alone—money that could stay in families’ pockets with a CBDC system that allows direct government-to-citizen transfers and eliminates many banking intermediaries. The millions of Americans who remain unbanked or underbanked would finally have access to basic financial services without requiring a traditional bank account.
Even for those in the baking system, the benefits of a CBDC are potentially enormous. Wire transfers, which cost $13-$44 each on average and take days to settle, could become nearly instantaneous and free. That speed in payment settlement would also make a huge difference to Americans when they need emergency aid quickly, as a CBDC could allow the government to deliver relief payments in minutes rather than weeks.
The urgency in America to adopt a CBDC extends beyond domestic concerns. In an era of growing geopolitical competition, monetary policy has become a tool of statecraft. The country that controls the dominant digital payment infrastructure will wield enormous influence over global commerce. China understands this, which is why it has invested heavily in digital yuan infrastructure and is actively promoting its use. China is creating first-mover advantages that will be difficult or even impossibly to overcome if we continue to stall.
The Federal Reserve has spent years studying CBDC technology. We should be encouraging and guiding them on this task rather than holding them back. In doing so, critics should keep in mind that CBDC implementation need not be revolutionary. A digital dollar should complement rather than replace physical currency, giving Americans choice while maintaining familiar monetary arrangements. So too could retailers freely choose whether to accept digital payments, just as they currently decide whether to accept credit cards. Additional privacy protections for all users can also be built into the system’s architecture, not added as an afterthought.
The real threat to American privacy and financial sovereignty isn’t a democratically governed CBDC—it’s ceding monetary leadership to authoritarian competitors and unaccountable private corporations that enrich themselves off our data while impoverishing the worst off among us.
The question isn’t whether digital currencies will reshape global finance, it’s whether America will lead this transformation or watch from the sidelines as others determine the future of money. For the sake of American competitiveness, financial inclusion, and yes, even privacy, it’s time for a digital dollar.
Nicholas Creel is an associate professor of business law at Georgia College & State University.
The views expressed in this article are the writer’s own.
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