On Tuesday, Daleep Singh, a former economic advisor for President Joe Biden told U.S. Senators that the administration was very willing for a digital Dollar as a means to crowd out private cryptocurrencies that facilitate ransomware and sanctions violations.
Biden appointed Singh as the deputy director of the National Economic Council and deputy national security adviser at the National Security Council, and he was serving the president as an economic advisor when the administration issued an executive order to encourage U.S. regulation of digital assets.
He said that Biden’s executive order from March 2022 was “trying to push US government to launch a Digital Dollar, which I think is the single best step that we could take because it would crowd out the ecosystem of crypto that allows national security adversaries like Russia to exploit our deficiencies, our weaknesses in terms of our critical infrastructure.”
Singh opined that a CBDC issued by the central bank could make a dramatic shift in both the banking industry and the crypto sector including its effect on non-governmental stablecoins whose role may overlap with a digital Dollar backed by the government.
Following the president’s executive order, the U.S. Treasury Department followed up with its report that recommended that the federal government would continue to work on a digital dollar while it assesses whether it is in the “national interest.”
Singh also suggested that cryptocurrencies would enable countries to “evade the impact of our sanctions,” to a certain extent. Though such evasion may not represent a major share of sanction violations, he said, “even a dollar of evasion is not something we ought to tolerate.”
Several Wall Street bank lobbyists have presented the idea of a digital Dollar as a threat to the stability of the financial system, but a report from the Office of Financial Research argued in July that a U.S. CBDC could give the government an early-warning system or signs of economic distress.
Notably, the Federal Reserve would have to issue and manage the Digital Dollar, and Christopher Waller, one of the board members, is openly opposed to the idea.
During the session, Singh also addressed crypto in response to questions from Sen. Elizabeth Warren who argued that cryptocurrencies are being used to hold U.S. businesses for ransom. She said:
It’s being used to evade American sanctions, and it’s being used to enrich America’s adversaries. We’ve got to stop helping these guys by letting crypto go unchecked.
Last week, Minnesota Congressman Tom Emmer introduced the CBDC Anti-Surveillance Act, which seeks to prevent the government from using the digital dollar as a tool for surveillance. Emmer’s bill has received support from within the Republican party, with House Committee on Financial Services Vice-Chairman and newly appointed digital assets subcommittee Chairman French Hill being among the proponents of the proposed legislation.