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14 Harv. Nat'l Sec. J. 67 (2022-2023)
A Meeting of Minds on Central Bank Digital Currencies for the United States: Commentaries from Participants in the Harvard National Security Journal's October 14, 2022 Symposium on Digital Currencies and National Security

handle is hein.journals/harvardnsj14 and id is 67 raw text is: COMMENTARIES A MEETING OF MINDS ON CENTRAL BANK DIGITAL CURRENCIES FOR THE UNITED STATES: COMMENTARIES FROM PARTICIPANTS IN THE HARVARD NATIONAL SECURITY JOURNAL'S OCTOBER 14, 2022 SYMPOSIUM ON DIGITAL CURRENCIES AND NATIONAL SECURITY Commentary by Howell Jackson* In the Article that launched today's symposium, The Orkney Slew and Central Bank Digital Currencies,1 Professors Gorton and Zhang spin a whimsical tale of trading across a North Sea archipelago into a trenchant essay exploring the economic benefits of a U.S. central bank digital currency (CBDC) and the challenges such a currency might pose for this country's national security. In a luncheon debate, the symposium audience was treated to a lively exchange between two individuals uniquely suited to weigh into these issues: former Deputy National Security Adviser Daleep Singh, who previously served as a senior official at the New York Federal Reserve responsible for coordinating with foreign central banks, and Federal Reserve Board Governor Christopher Waller, who has for many years been a leading academic expert on macroeconomics and monetary policy as well as head of research at the Federal Reserve Bank of St. Louis. One could not hope for a better qualified pair of sparring partners. Having served as the moderator of their engaging conversation, I will focus my remarks on what I understand to be the principal sources of agreement and disagreement between these two experts and share a few thoughts on next steps. Without a doubt, the speakers' assessments of the risks that a Chinese CBDC poses to U.S. dollar dominance is their most striking point of disagreement. The core of the national security threat is that the rise of foreign CBDCs could threaten dollar dominance and substantially weaken this country's ability to deploy economic sanctions as an effective tool of foreign policy in the future. Within policy circles, the People's Republic of China (PRC) is thought to be the foreign country best positioned to exploit the emergence of CBDCs in this way, were it inclined to do so.2 Both speakers agree that the PRC's recently-launched CBDC-the e-CNY-lacks critical privacy protections and an underlying legal structure that would be necessary * James S. Reid, Jr., Professor of Law, Harvard Law School. 1 See Gary B. Gorton & Jeffery Y. Zhang, The Orkney Slew and Central Bank Digital Currencies, 14 HARV. NAT'L SEC. J. 1 (2022). 2 Some commentators posit, however, that China's development of a CBDC is better understood as a response to domestic priorities as opposed to foreign policy considerations. See, e.g., Jake Laband, Existential Threat or Digital Yawn: Evaluating China's Central Bank Digital Currency, 63 HARV. INT'L L.J. (forthcoming 2023).

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