Key Takeaways
- A central bank digital currency is digital money issued directly by a central bank, and how private it is depends on design choices made by the issuing government.
- Giancarlo argues that a U.S. digital dollar designed with privacy protections would be subject to First and Fourth Amendment limits that do not bind private stablecoin issuers.
- An executive order now bars federal agencies from establishing, issuing, or promoting a U.S. CBDC, and the House has passed a bill to ban one, while Europe continues work on a digital euro.
More than a hundred countries have explored issuing their own digital currencies. What would a digital dollar mean for American power, and for the privacy of everyone who spends it?
In this TalksOnLaw Brief, Joel Cohen talks with J. Christopher Giancarlo, the 13th Chairman of the U.S. Commodity Futures Trading Commission and co-founder of the Digital Dollar Project, about central bank digital currencies, or CBDCs, and the legal stakes of designing government money for the digital age.
The Global Race for Digital Money
Giancarlo describes a world in which more than a hundred countries are exploring sovereign digital money, including most of the G20. China has developed its e-CNY, which he says had already reached more than 240 million wallets, and Europe has announced plans for a digital euro. He explains why the dollar's global role matters. Many of the world's major commodities, such as oil, iron ore, wheat, and soybeans, are priced in dollars, in part because of the depth and quality of U.S. markets, so countries everywhere hold dollars. In uncertain times, the world also turns to U.S. Treasury securities for safety. That demand lets the United States fund much of its government through debt. He worries that widespread use of China's digital currency technology could erode that position.
Surveillance, Privacy, and the Constitution
Giancarlo stresses that design choices are critical. He describes China's digital yuan as sophisticated but equipped with full surveillance and censorship capability, which could be used to cut off a critic's ability to pay for a train ticket or rent. Yet he rejects the assumption that private digital money is automatically more private. Bitcoin, he says, offers strong privacy, but stablecoins have no legal privacy protection. Private companies are not bound by the First or Fourth Amendment, while the federal government is. Designed correctly, in his view, a digital dollar could offer more privacy than a private stablecoin. If the United States got privacy right, people might flock to it; if it got privacy wrong, they would flee.
Choosing the Balance Points
Joel Cohen raises the other side: a government-controlled currency could let authorities freeze a sanctioned country's funds or reverse a theft, powers that may make people wary. Giancarlo answers that digital money turns these tolerances into design choices. A free society, he argues, should debate where to set the balance among privacy, stability, and law enforcement, and then write those choices into the code itself.
What to Know Now
U.S. policy has since moved away from a government-issued digital dollar. In January 2025, Executive Order 14178 prohibited federal agencies from taking any action to establish, issue, or promote a CBDC, and terminated any ongoing plans to create one, except as required by law. In July 2025, the House passed the Anti-CBDC Surveillance State Act, which would bar the Federal Reserve from issuing a CBDC; it has not been enacted. Supporters of a ban point to the same surveillance risks Giancarlo describes, while advocates of a digital dollar argue that privacy can be designed in. Congress also enacted the GENIUS Act in 2025 to regulate privately issued payment stablecoins. Abroad, the European Parliament voted in 2026 to open final negotiations on digital euro legislation, and the European Central Bank has said it aims to be ready for a possible first issuance in 2029 if that legislation is adopted. The privacy questions Giancarlo raises continue to shape debates over both public and private digital money.
