Having questioned, in a previous post, some proclaimed benefits of a Strategic Bitcoin Reserve, and specifically the claim that building such a reserve would strengthen the US dollar, I now wish to say something about what the proposed Bitcoin reserve will cost. In particular, I wish to discuss the cost of the BITCOIN Act’s plan to have the US government buy up to a million Bitcoins over the course of the next five years.

Too Good to Be True

“Cost?” you may be thinking; “What cost?” After all, as a recent report on the plan points out, it and some other proposals plans for establishing a Strategic Bitcoin Reserve neither require any increase in taxes nor add to the national debt. “Instead,” the report explains, “the government could leverage its existing resources, particularly gold certificates held at the Federal Reserve’s 12 banks.”

No new taxes? No more government borrowing? Glory and hallelujah! The authors of the BITCOIN Act have discovered a way to treat the taxpaying US public to a one-million Bitcoin (or, at today’s Bitcoin price, approximately $100 billion) free lunch! It seems too good to be true!

Alas and alack, and as usual, it is. Despite not calling for any new taxes or for any addition to the national debt, the BITCOIN Act is no free lunch. Instead, the proposed Bitcoin purchase will actually end up costing the government more than if the Treasury raised the necessary funds by selling securities. 

To understand why, we must delve into the details of the BITCOIN Act’s “Bitcoin purchase plan.” That plan, which would have the government acquire up to 200,000 Bitcoin every year for five years, actually consists of three components. First, for five years, it would tap into the Federal Reserve System’s Treasury remittances—the interest the Fed earns on its security holdings minus Fed banks’ interest and operating expenses—devoting up to $6 billion of those remittances per year to Bitcoin purchases. Second, it would transfer $4,425 billion from the Federal Reserve System’s capital surplus account to the Treasury’s general fund, also to be spent on Bitcoin, reducing the Fed’s surplus to less than $2.4 billion. Finally, by changing gold’s official price from its present level of just over $42.22 per fine troy ounce to something like gold’s present market price of almost $2,700 per ounce, and having the Fed monetize the resulting circa $700 billion gain in the official value of the Treasury’s gold stock, it would supply the Treasury with ample funds with which to purchase up to 200,000 Bitcoins per year for five years. Were the Treasury able to buy all those Bitcoins at an average price of $100,000, those purchases would cost $100 billion, or about one-seventh of the Treasury’s golden gain. Put another way, were it to end up having to pay an average price of $700,000 per Bitcoin, the government could still afford to buy a million coins without having to draw on existing tax revenues, raise taxes, or float more debt.

Run Dry

Because the BITCOIN Act mainly relies on the third gold-revaluation method for financing a one million coin Strategic Bitcoin Reserve, I want to devote most of this post to assessing that part of the act’s Bitcoin purchase plan. But let’s first consider the plan’s other components.

The first of those other components—the plan to devote some of the Fed’s Treasury remittances to Bitcoin purchases—can be dealt with quickly because it’s unlikely to be taken advantage of. That’s so because, instead of earning a profit as it almost always used to, thanks to having to pay higher rates on bank reserves than it earns on the long-term securities it gobbled up during past crises, the Fed has lately been losing money hand over fist. As a result, it hasn’t sent the Treasury any money since September 2023, and it won’t do so again until it has first paid down over $200 billion in accumulated paper losses. Since the Congressional Budget Office was already predicting in June that doing so would take until 2030, the BITCOIN Act’s Fed remittance component isn’t likely to fund any substantial Bitcoin purchases.

Budgetary Slight-of-Hand

That the Fed has been running in the red doesn’t altogether prevent the Treasury from taking advantage of it to fund a Strategic Bitcoin Reserve. In fact, all three components of the BITCOIN Act’s Bitcoin purchase plan have the Fed helping out in some fashion, if only unwillingly, while the remittance-diversion plan alone depends on its turning a profit.

Instead of relying on those profits, the Bitcoin purchase plan’s second component has the Treasury grabbing most of the Fed’s capital surplus. Even now, at $6.8 billion, that surplus is paper thin compared to its $29.3 billion level when the FAST (Fixing America’s Surface Transportation) Act was passed in December 2015. Having failed to agree to legislation that might have allowed the FAST Act’s $305 billion price tag to be fully paid by traditional means, Congress chose instead to limit the Fed’s surplus capital to $10 billion. Doing so forced the Fed to immediately fork $19.3 billion over to the Treasury, which added it to the Highway Trust Fund. Two 2018 appropriation bills transferred another $3.2 billion of the Fed’s surplus capital, capping it at its remaining, lowered level of just $6.8 billion.

Although the FAST Act wasn’t the first time Congress treated the Fed’s surplus as a source of off-budget funding—in 1933, it drew on it to provide the FDIC’s working capital—the 2015 measure marked the first use of the Fed’s capital to fund activities having nothing to do with monetary or bank regulatory policy. So it’s pretty obvious that the BITCOIN Act’s plan to once again raid the Fed’s capital was inspired by the FAST Act precedent.

What’s wrong with that? The same thing that was wrong with the FAST Act’s own Fed raid, namely, that even if it did the Fed no harm, it amounted to what former Fed Chair Ben Bernanke called “a form of budgetary sleight-of-hand that would count funds that are already designated for the Treasury as ‘new’ revenue.” As Bernanke explained when the FAST Act was in the works, to actually come up with the $19.3 billion it owed the Treasury, the Fed had to sell securities, thereby reducing its future earnings and future Treasury remittances. “The net effect,” Bernanke says, “is precisely the same as that resulting from the issuance of fresh government debt.” Cato’s Center for Monetary and Financial Alternatives adjunct scholar Jeff Hummel reached the same conclusion while supplying further details. So did a 2002 GAO study of the general fiscal consequences of reducing the Fed’s surplus capital. “Amounts transferred to the Treasury from reducing the [Fed’s] capital surplus account,” the study says, “would be treated as a receipt under federal budget accounting but do not produce new resources for the federal government as a whole.” 

Nor is it certain that reducing the Fed’s surplus capital to avoid raising taxes or increasing the national debt does no harm. Although it’s true that fiat-money issuing central banks can operate without capital, as a 2017 GAO investigation reports, academics and Fed officials worry that the practice “might lead the public and financial markets to question if the Federal Reserve was independent from the executive and legislative branches.” The GAO also concluded that such questioning becomes more likely when recurring transfers threaten to eventually reduce the Fed’s capital to zero.

Striking Gold

So we come to the third and most important component of the BITCOIN Act’s Bitcoin purchase plan: the funding of Bitcoin purchases using the proceeds from gold revaluation and monetization. Although the Federal Reserve banks haven’t owned any gold since January 1934, their assets include Treasury gold certificates worth over $11 billion. Those certificates are backed by an equal sum of gold, according to its official price of just over $42.22 per troy ounce. The gold itself is owned by the Treasury and stored at Fort Knox and various other Treasury depositories. Were the BITCOIN Act to pass, gold’s official price would be raised to its market price. Assuming a market price of $2,700 per ounce, that would make the Treasury’s gold officially worth almost 64 times its present value. The Treasury would then swap new gold certificates reflecting gold’s higher official price for the ones now in Fed banks’ possession. Upon receiving the new certificates, the Fed banks would have 90 days in which to “remit the difference in cash value between the old and new gold certificates to the Secretary for deposit in the general fund,” thereby monetizing the Treasury’s accounting profit.

Still assuming gold to be worth $2,700 per ounce, these transactions would yield the Treasury a tidy sum just shy of $700 billion. Were the Treasury able to buy a billion Bitcoin at an average price of $100,000, or somewhat more than Bitcoin’s actual market price as I write this, the gold monetization scheme would give the Treasury seven times the sum needed for the purchase, without the government having to raise more tax revenue and without adding a nickel to the national debt!

Backdoor Borrowing

As I noted before, this sounds too good to be true. The catch is that, although it’s strictly true that the plan calls for no increases in taxes or the national debt, it’s no bargain; because despite not raising the national debt, it turns out to be equivalent to having the Treasury borrow $100 billion (or whatever its Bitcoin purchases end up costing) directly from the Fed (putting-up gold as collateral), and indirectly from the nations’ banks, at interest rates that are higher, and perhaps much higher, than it could get by selling securities.

To see why, let’s consider how the various operations just described affect both the Fed’s and the Treasury’s balance. Once again I’m assuming that revaluing the Treasury’s gold stock raises the value of its gold by $700 billion. To monetize that gain, the Treasury takes back the Fed’s existing gold certificates and gives the Fed new ones worth that much more. The Fed then credits the Treasury General Account (TGA) by the same amount. So we have, in billions:

Federal Reserve: 

Assets (Gold Certificates) + $700; Liabilities (TGA Balance) +$700

Treasury: 

Assets (TGA Balance) + $700; Liabilities (Gold Certificates) +$700

So far, so good. But the Treasury still has to buy a million Bitcoins. Let’s assume, as before, that doing so costs $100 billion. Let’s also assume, heroically, that the Treasury resists spending any more of its apparent $700 billion windfall. The new dollars spent on Bitcoin get deposited with US banks, increasing their reserves. The changes are:

Federal Reserve: 

Liabilities (TGA Balance) -$100; Liabilities (Bank Reserves) +$100 

Treasury: 

Assets (TGA Balance) -$100; Assets (Bitcoin) +$100

Once again, what the government has done is finance a $100 billion Bitcoin purchase with what amounts to a permanent $100 billion interest-free Federal Reserve loan, collateralized by that much of the Treasury’s increased nominal gold hoard. Although the Fed doesn’t directly charge the Treasury any interest on the $100 billion credited to the TGA, the Fed itself finances that credit by borrowing $100 billion more from the nations’ banks. And those banks do charge interest, as it were, at whatever rate the Fed pays on bank reserves. Since gold certificates earn no interest, the whole operation reduces the Fed’s profits and Treasury remittances by the full amount of those additional interest payments. The overall fiscal burden is therefore much as it might be were the Treasury to borrow $100 billion directly from the banks at the same rate the Fed pays them. But since the lending is financed by bank reserves instead of new Treasury securities.… Hey presto! It isn’t counted as part of the national debt.

Yet national debt it is, economically if not officially. And costly national debt at that. How so? At 4.65 percent, the current interest rate on bank reserves is higher than six-month and one-year Treasury bill rates of 4.26 percent and 4.27 percent, respectively. And it is much higher than the rate on three-year Treasury notes, which is now just 4.08 percent. Nor is the present situation unusual: The interest rate on reserves, being an overnight rate, is generally higher than rates on longer-term Treasury securities. Assuming that the Treasury holds all the Bitcoins it purchases for 20 years instead of selling any to pay off the national debt (the only options the BITCOIN Act allows), during that time banks will have earned, and the Fed will have lost, about $153.5 billion as a result of the government’s Bitcoin investment. Were the Treasury instead to raise the money needed to buy a million Bitcoins by selling $100 billion worth of three-year Treasury notes, the interest cost would be about $124.2 billion, or over $29 billion less.

It’s $25 billion less, but more visible, for were the Treasury to finance its Bitcoin purchase by issuing more securities, the national debt would go up; and it is precisely in order to avoid having the debt go up, to skip past the ordinary appropriations process, and to otherwise pull the wool over Americans’ eyes, that the BITCOIN Act relies on so much gold-plated hocus pocus. What better way, after all, to gain the public’s support for a plan that may only serve to pump Bitcoin holders’ bags than by making it look like it won’t cost a thing?

After President Joe Biden signed an executive order instructing the government to research and develop central bank digital currency (CBDC), nearly every agency responded with public reports. The one outlier was the Department of Justice (DOJ), which opted to withhold its legislative analysis from the public eye.

I’ve had a Freedom of Information Act request pending for two years now in hopes of making the DOJ’s analysis public, and I’m not the only one seeking answers. Members of Congress have noticed the missing analysis as well. Representative French Hill (R‑AR) and ten other members of Congress wrote to Attorney General Merrick Garland in October 2022 when it became clear that the information had been withheld.

In the two years that have passed since our initial queries, neither my Freedom of Information Act request nor Representative Hill’s letter have been answered. When we discussed the matter, Representative Hill said, “I have pressed the DOJ for two years to receive a copy of their memo on CBDCs yet have received nothing but silence.” He further said,

The House was clear when it passed the Emmer-Hill CBDC Anti-Surveillance State Act to prohibit the Federal Reserve from issuing a CBDC and Chair Powell has publicly stated the Fed would not proceed on a CBDC without Congress—it should not be so difficult for the White House and DOJ to say they agree. The Biden-Harris Administration’s efforts to exert broad and untested executive authority by forgiving student loans give Americans every right to fear the same expansive executive power being abused once more with the creation of a CBDC. I applaud Cato’s FOIA request to obtain this information. If the White House and DOJ have nothing to hide, they should make this memo public and respect Congress’ constitutional authority to coin and regulate the value of money.

Representative Hill is right: it should not be difficult for the DOJ to make this information available. At the end of the day, the information in question is not on the location of witnesses in ongoing cases or the details of undercover agents. Rather, the DOJ was only asked to explain “whether legislative changes would be necessary to issue a United States CBDC” and to provide “a corresponding legislative proposal.” That’s it.

Yet despite the efforts of myself and Representative Hill, the only publicly available information about the DOJ’s analysis appears to be in the footnote of a press release announcing the publication of other reports related to President Biden’s executive order.

Perhaps it’s notable that out of the many reports required by executive order, the question of CBDC legislation was the only one that went to the Assistant to the President for National Security Affairs (APNSA) and the Assistant to the President for Economic Policy (APEP) instead of to the president directly. Still, this information should have been made publicly available once it became clear the public was interested in it.

Given how the rise of CBDCs has increasingly become a public concern, the American people deserve to know what the DOJ and the White House think needs to be done to create a CBDC. 

Millions of Americans do not have a bank account. Known as the “unbanked,” these Americans are often referred to in discussions of financial inclusion. As it stands, the latest survey from the Federal Deposit Insurance Corporation shows that there are currently 5.6 million unbanked households. However, as policymakers read the survey and begin to craft responses, they should take note of all of the data provided rather than the total number of unbanked households alone.

Given that more than 70 percent of the unbanked routinely say they are uninterested in having a bank account, perhaps it is time to redefine the term “unbanked.”

To understand why this distinction is necessary, first consider a more familiar statistic: the unemployment rate.

Although reported as just the “unemployment rate,” the official unemployment rate reflects not just the number of people who are unemployed, but rather the number of people who are unemployed and are actively seeking employment. The general idea is that including college students solely focused on their studies, full-time parents solely focused on caring for children, and the like would give an inaccurate picture of the labor market. Sure, these people do not have jobs, but at the same time they don’t want jobs.

Turning back to the unbanked, there is a similar distinction to be made. Much like interest in a job should be factored into the unemployment rate, so too should interest in a bank account be factored into the unbanked rate. Ideally, this interest would be quantified as the number of people who have tried to open an account in the last six months. Although this exact information is not currently available, the Federal Deposit Insurance Corporation’s biennial survey of unbanked households does have a question that asks unbanked Americans how interested they are in opening an account, and the numbers are astounding.

Over 70 percent of unbanked Americans routinely say they are not interested in having a bank account (Figure 1).

By adjusting for the number of people interested in having a bank account, suddenly the problem becomes drastically different. What were 5.6 million households being classified as unbanked suddenly shrinks to 1.6 million households.

Is this still a problem? Yes. It may be a small portion of the population, but this number shows there are 1.6 million households who want a bank account and don’t have one. That is certainly a problem for these Americans.

The difference is that now we know this is not a problem that requires overhauling the entire financial system—something many people have suggested in calls for central bank digital currencies and postal banking. Rather, it suggests that if any approach is taken, it should be targeted and limited in scope.

As policymakers read the Federal Deposit Insurance Corporation’s latest survey on the unbanked, they would be wise to keep this distinction in mind.

The European Central Bank remains committed to developing a central bank digital currency (CBDC), but it seems not every member of the Eurozone is equally interested.

According to reporting in Politico by Giovanna Faggionato and Ben Munster, “Several European Union governments, including France and Germany, argue the [European Central Bank] has gained too much control over one crucial aspect: how much digital currency citizens will be allowed to hold in ‘wallets’ backed by the central bank.”

The issue in question relates to concerns that a CBDC could increase both the severity and the frequency of bank runs. To remedy this concern, many policymakers have proposed setting restrictions on how a CBDC is used. For example, some proposals aim to limit the total amount a citizen may own while other proposals aim to limit how much a citizen may spend over time.

Policymakers generally hope these restrictions would limit how much money can leave the banks in a time of panic. Yet the issue isn’t so simple in practice.

If the limit is too high, it won’t be effective in curbing bank runs. If the limit is too low, it will prevent people from using the CBDC. In my book, Digital Currency or Digital Control? Decoding CBDC and the Future of Money, I describe this issue at length as the “CBDC tradeoff” (a term first coined by economist William Luther). In short, the tradeoff is between making something people might want at the expense of the larger financial system versus making something no one will want and outright wasting taxpayer resources.

It seems European politicians are increasingly taking notice of the pitfalls that come with this tradeoff. Politico reported that European politicians are concerned that a CBDC would “jeopardiz[e] the stability of the entire banking system,” “infringe on personal financial freedom,” and “stok[e] fears of a ‘Big Brother’ state.”

All of these concerns are warranted. And considering that the benefits of issuing a CBDC in the first place are not clear, the CBDC tradeoff should be rejected altogether. That is, people shouldn’t be forced into choosing between two bad options.

Back in the spring, the House of Representatives passed a bill to prohibit the creation of a CBDC in the United States. At the time, some members of Congress objected saying that this bill would make the United States the only country in the world to reject CBDCs. Based on the debates in the Eurozone right now, it’s possible the United States won’t be the only one objecting for long. It may turn out that the United States carved a path for others to follow.

Are you interested in learning more about CBDCs? My book, Digital Currency or Digital Control? Decoding CBDC and the Future of Money, is available here. Also, if you are interested in learning about the status of CBDC development around the world, the Human Rights Foundation’s CBDC Tracker is available here.

The Treasury Borrowing Advisory Committee has published a new presentation calling for central bank digital currencies (CBDCs) to replace stablecoins. Pointing to a history of so-called “wildcat banking,” the committee argued that just as the government monopolized the issuance of paper currency by establishing the Federal Reserve, the government should monopolize digital currency by establishing a CBDC:

In a similar manner to how privately-issued “wildcat” currencies were replaced by government-backed central currencies in the late-1800s, Central Bank Digital Currencies (CBDC) will likely need to replace stablecoins as the primary form of digital currency underpinning tokenized transactions.

This statement has several problems, but let’s consider just three.

The first problem is the implication that the history of banking in the United States was a history of wildcat banking. The idea that banks were defrauding customers and disappearing with their money is certainly a concerning one. And it did happen at times. However, such wildcats were far from the norm. 

While it is difficult to put an exact number on the issue, George Selgin, director emeritus of the Cato Institute’s Center for Monetary and Financial Alternatives, estimates that the total number of wildcats was “no higher than 173.” In contrast, he estimates there were around 2,450 banks in total during this time. 

Second, while many people like to suggest wildcats were the source of failures during this period, the bigger problem was that the laws governing banks had undermined financial stability. Again, as Selgin explains, “free banking” laws during this period,

forced banks to invest in … very risky securities—and especially in risky state government bonds—while the rule against branching limited their ability to diversify around this risk…. It was owing to these restrictive components of U.S.-style free banking that scads of American free banks ended up going bust.

Third, it does not follow that because the government took over one area of money, it should take over another. What the experience in the 1800s showed was that the government has a unique power over others. Competitors in the private sector must strive to offer a better product. The government, however, can undermine others through laws and regulations that make it nearly impossible for the private sector to function. For a modern example, one need only look to the government’s hostility towards stablecoins and other cryptocurrencies.

With these problems in mind (and many still on the table), it’s unfortunate that the Treasury Borrowing Advisory Committee found the wildcat argument persuasive. Yet the committee is not alone. This argument has been used by the likes of Senator Elizabeth Warren (D‑MA), Securities and Exchange Commissioner Gary Gensler, then-Federal Reserve Vice Chair Lael Brainard, European Central Bank President Christine Lagarde, European Central Bank board member Fabio Panetta, and countless others in the pursuit of expanding the state.

The real lesson from the “wildcat story” is that policymakers must be held accountable. They should not be allowed to undermine an entire industry and they should not be allowed to swoop in to monopolize it when it eventually fails. That was true in the past and it’s true today. The difference comes down to whether Americans let it happen again. 

In September, the Fed cut the target range for its policy rate by 50 basis points to much publicity, with several media outlets claiming that this was the first step toward reducing borrowing costs and easing the debt burdens faced by many Americans. Of course, the implicit assumption is that economy-wide borrowing rates such as auto loans, credit cards, or mortgages are intrinsically linked to the Fed’s policy instrument—the federal funds rate (FFR). It may come as a surprise, then, that several borrowing rates, ranging from treasury securities to mortgage rates, have increased since the Fed’s rate cut.

In fact, the discrepancy between the FFR and other borrowing rates has been prevalent for some time. The rates had started to increase before the series of rate hikes executed by the Fed in response to post-pandemic inflation. On the surface, it is fair to assume that changes to the FFR should be transmitted through to other borrowing rates. After all, the FFR is believed to represent the cost borne by financial institutions to acquire liquid reserves for themselves in the interbank lending market. If the cost to acquire funds is low, then the cost of lending these funds to consumers must be equivalently low. However, since the overhaul of the Fed’s operating procedures in the aftermath of the financial crisis, the FFR no longer holds sway as it once did.

Following the financial crisis of 2008-09 and its associated recession, the Fed shifted to a “floor system” that would ensure abundant reserves in the financial sector. That is, it instituted policies such as interest on excess reserves and quantitative easing that ensured banks would maintain a large surplus of reserves, reducing their need to engage in interbank lending and thereby reducing the importance of the FFR. Of course, the FFR still matters as a numeric stance of monetary policy, but it is hard to see how it can hold any importance beyond this signaling effect.

Data on borrowing costs confirm this hypothesis. Figures 1–3 show the correlation between monthly FFR and three other key borrowing rates. These include the 30-year mortgage rate (Figure 1), Moody’s Baa corporate bond yield (Figure 2), and the 10-year Treasury yield (Figure 3)—which represent benchmarks for consumer, corporate, and government debt, respectively. Additionally, correlations were computed for various lag structures so that any leading or lagging effects between the FFR and other borrowing rates may be observed. This analysis was conducted over two periods—the Great Moderation (1984 through 2006) and the post–financial crisis (2009 to present)—to see how the post-2008 change to the Fed’s operating system affected these correlations.

As all figures show, before the financial crisis, the FFR was linked almost perfectly (i.e., a near 100 percent correlation) with other borrowing costs. Within the same month, changes to the FFR were matched by near identical changes to other borrowing costs. This is no longer true following the financial crisis. Under the Fed’s revised framework, the same-month correlations fall drastically. FFR correlation with the 30-year mortgage rate falls to 70 percent, with Baa bond yield falling to 58 percent, and with the 10-year Treasury yield falling to 71 percent.

Additionally, the skew of the cross-correlation distribution has changed since the financial crisis. Before 2007, the correlation distribution was symmetrical around a zero lag. That is, changes to the FFR and other borrowing rates occurred simultaneously with neither being a leading nor lagging indicator of the other. However, under the post-crisis regime, the distribution shows a significant left skew. This implies that the FFR is much more likely to be correlated with other borrowing rates at a lag and much less likely at a lead. Put differently, the results suggest that other borrowing costs move first (probably in response to economic conditions) and are then followed by movements to the FFR.

Naturally, the FFR is still correlated with other rates even though this correlation has fallen significantly over time. This is because all borrowing rates respond to general economic conditions that may warrant tighter or looser lending conditions. However, the results presented here indicate that the mechanism by which this transmission occurs from the broader economy to relevant borrowing costs seems to bypass the Federal Reserve. If anything, the Fed seems to take its cue from the markets, not the other way around.

This analysis only adds to the litany of evidence we have presented that the Fed matters much less than people think. Of course, some may claim that the Fed is still a primary determinant of lending conditions but that how it controls such markets has changed. If that is true, then the onus is on the Fed to provide a detailed explanation of which policy instrument now matters instead of the FFR and the mechanism by which this instrument affects lending standards and, thereby, its dual mandate objectives of low inflation and stable employment. So far, it has not provided any such explanations.

The author thanks Jerome Famularo for his excellent research assistance in the preparation of this blog.

The Human Rights Foundation’s Central Bank Digital Currency (CBDC) Tracker shows that over 1.5 billion people are living in countries where CBDCs have been rolled out. However, not all central banks appear to be on board. The central banks in Canada, Australia, and Colombia recently came out in opposition to the idea of issuing CBDCs. 

In an update to its website, the Bank of Canada said it is “scaling down its work on a retail central bank digital currency and shifting its focus to broader payments system research and policy development.” Just before that, the Reserve Bank of Australia published a report that said, “There is no clear public interest case to issue retail CBDC in Australia as yet.” Finally, in July, the Banco de la República de Colombia published a report that said “there are not sufficient reasons for the issuance of [a CBDC] (retail or wholesale) in Colombia.”

It may be difficult to imagine government opposition given that the risks of CBDCs largely center on giving governments more power and that power is being rapidly pursued around the world. However, the news from these three countries shows that not everyone is on board.

To be clear, the statements made by the Canadian, Australian, and Colombian central banks are by no means binding, but these statements are a welcome change of pace, nonetheless.