Paths Toward an Acceptable Public Digital Currency

Serious discussions are underway inside the U.S. Federal Reserve and other central banks around the world on creating a new form of government-issued digital money. There are good reasons to embrace the idea of a digital dollar; the private companies that currently provide our electronic money censor and spy on their customers’ transactions and often charge fees that limit accessibility for low-income and marginalized people. But would a digital dollar be any better for accessibility? And would it be a privacy disaster? Everything depends on how it’s built.

In this paper, ACLU’s Jay Stanley looks at some of the design options that are being discussed and which would be good for privacy and accessibility. Above all, he argues, where there are cryptographic techniques that can protect privacy and free speech while at the same time allowing for reasonable government crime-prevention efforts, those techniques must be
employed.