The United States is in the pilot phase. Over the years, the Federal Reserve has conducted multiple pilots, experiments, and studies. Furthermore, President Joe Biden issued Executive Order 14067 to place “the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC.”

CBDC History and Development

In August 2020, the Federal Reserve Board announced that the “Federal Reserve Board's Technology Lab (TechLab) is expanding experimentation with technologies relevant to digital currencies and other payment innovations.”

Since then, the Federal Reserve has published multiple studies on CBDCs. Elsewhere, under the name “Project Hamilton,” the Federal Reserve Bank of Boston announced that it would build and test a “hypothetical central bank digital currency for wide-scale, general purpose use.” The Federal Reserve Bank of New York, under the name “Project Cedar,” also started an initiative to research wholesale CBDC designs. In “Project Cedar Phase II x Ubin+,” the Federal Reserve Bank of New York collaborated with the Monetary Authority of Singapore to “investigate how wholesale central bank digital currencies (wCBDCs) could improve the efficiency of cross-border wholesale payments involving multiple currencies.” The Federal Reserve Bank of New York later announced that it too would engage in a proof-of-concept project. Therefore, the United States is considered to be in the pilot phase.

In March of 2022, President Biden issued Executive Order 14067 to place “the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC.” In September 2022, the White House said that the reports issued under Executive Order 14067 “encourage the Federal Reserve to continue its ongoing CBDC research, experimentation, and evaluation and call for the creation of a Treasury‐led interagency working group to support the Federal Reserve’s efforts.”

The Biden administration also announced that it had “developed policy objectives for a US CBDC, which reflect the federal government’s priorities.” Going further, the Biden administration published a technical evaluation for a potential US CBDC.

The Federal Reserve has also been unclear about its authority to issue a CBDC. In March 2023, Federal Reserve chair Jerome Powell said the Federal Reserve would need congressional authority to issue a retail CBDC, but he was careful to note that it is a different story when it comes to other forms of CBDCs. This statement is concerning because the Federal Reserve built its proposal on the idea of an intermediated CBDC, which blurs the lines between a retail and wholesale CBDC. In March 2024, chair Powell told Congress, “We are nowhere near recommending, let alone adopting, a central bank digital currency in any form.” However, he added that “If we were ever to do something like this… we would do this through the banking system.”

Human Rights and Civil Liberties Concerns

The United States earned an 83 out of 100 in Freedom House’s 2023 Freedom in the World report. However, despite often being referred to as one of the freest countries in the world, there are problems in the United States. The issues most related to the issuance and use of a CBDC include sweeping financial surveillance and civil asset forfeiture. A CBDC could worsen both.

Although the U.S. Constitution protects a right to privacy, those rights do not extend to financial privacy. For example, under the law, banks and other financial institutions were required to file over 26 million reports to the government on customer activity in 2022. As if these reports were not enough on their own, law enforcement does not need a warrant to go after financial information. That reality was seen in practice when it was revealed that Immigration and Customs Enforcement collected over 6 million financial records. Unfortunately, a CBDC could be used to greatly expand surveillance by putting financial records on government databases by default.

Another concern is in the seizure of people’s money—referred to as civil asset forfeiture. The Institute for Justice has described this process as “one of the gravest abuses of power in the country today.” Others have referred to the process as “legalized theft.” A CBDC could worsen this practice by giving law enforcement new avenues to surveil people’s finances.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.