Former Biden adviser urges development of digital dollar to ‘crowd out’ private crypto
Daleep Singh told the senate banking committee that developing a CBDC is the best way to combat sanction evasion and financial crimes via private crypto.
Former Joe Biden administration adviser Daleep Singh told the senate banking committee on Feb. 28 that developing a central bank digital currency — i.e., a digital dollar — would help safeguard national interest and supersede private cryptocurrencies.
Singh formerly served as Deputy National Security Advisor for International Economics and Deputy Director of the National Economic Council. He was one of the main people who developed the sanctions placed on Russia following its invasion of Ukraine.
In response to queries from Elizabeth Warren, Singh said that crypto allowed bad actors to conduct certain financial crimes like ransomware and agreed that they would not be possible without cryptocurrencies.
Warren asked whether crypto enabled such bad actors to dodge U.S. sanctions and what could be done about it. Singh responded that cryptocurrencies do allow Russia and other sanctioned entities to evade U.S. sanctions to some degree but not “at scale.” He further elaborated that:
“Even a dollar of evasion is not something we should tolerate.”
Singh also said that crypto allows national security adversaries and criminals to exploit the deficiencies and weaknesses in critical U.S. infrastructure. He added that to combat these issues, the “single best step” would be to develop a digital dollar as it would “crowd out” the current crypto ecosystem.
Developing a CBDC would reduce the need for private crypto, especially for retail payments, as most people are more likely to use something backed by the state.
Warren closed the interaction by stating that she is reintroducing her anti-money laundering bill related to cryptocurrencies in an effort to combat ransomware and the evasion of sanctions.
Lawmakers remain divided on the topic of developing a digital dollar, with proponents like Warren and Singh claiming it will help reduce financial crimes and “reinforce the primacy of the dollar.”
On the other hand, Congressman Tom Emmer has raised concerns that CBDCs could become a surveillance tool that puts citizens’ financial privacy at risk. He recently introduced a bill that aims to limit the ability of the Federal Reserve to affect monetary policy using a CBDC and from directly issuing a digital dollar to citizens