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Opinion
Darrell Duffie

Excited About a Digital Dollar? Not So Fast.

The privacy technology isn’t ready. Meanwhile, there’s a lot the U.S. can do to improve the existing payment system.

You are being watched.

You are being watched.

Photographer: Jade Gao/AFP/Getty Images

President Joe Biden’s effort to craft a U.S. strategy for cryptocurrencies has highlighted a big question: Should the Federal Reserve enter the fray by issuing a digital version of the national currency, as China and others have already done?

Although some are urging the U.S. to act, there’s really no need to rush that decision. The digital-currency technology required to safeguard Americans’ privacy will take years to develop. Meanwhile, policy makers can do a lot to improve the payment system by other means.