Not just surveillance, it would be much easier for the government to restrict where you can spend your money, place a time limit / expiration on when the money can be spent, and inject cash into the economy much more quickly (no overhead) than they can now.

All of these are nightmarish.

“Free”

Surveillance accounts are already the case. And, we already conduct "Digital Cash" payments every day - Credit cards, ACH and Wire transfers and many other means where physical paper bundles of cash aren't literally shipped when you send money to another country.

I guess, can you exemplify what exactly the government would be able to do with this bill vs. what it can already do? If they send you a check, that's not helping you much. It goes through the bank and there is 100% traceability of the $$$ from the Fed to your bank account which is already very much "Digital".

> Surveillance accounts are already the case.

Not quite. I can spend cash and nobody knows when or where I did so.

> If they send you a check, that's not helping you much. It goes through the bank and there is 100% traceability of the $$$ from the Fed to your bank account

Many, many Americans receive checks as payment which they then take to a service which will exchange the check for cash in hand, no bank account required. The check issuer has no idea where or how the money gets spent.

Let me illustrate:

FED -> JOE's bank account -> ATM cash withdrawal -> Buys private stuff $$$ cash

FED -> JOE cashes the check -> Buys private stuff with $$$ cash

The FED still knows that it went to JOE. Whether they use the bank as the intermediary or a check-cashing service as an intermediary, its all traceable.

May be my logic is flawed here? To me, it doesn't make any difference. In both cases, what JOE bought with hard $$$ cash is indistinguishable. I think we're making a big deal out of this - I haven't read the bill but I am presuming that its just a modernization of physical mailing of checks to some wire transfer.

I don't think they intend to make any convenient routes for these digital dollars back to untraceable cash.

After all, they'll be debit-card accessible to buy food or supplies; why would you need cash unless you're going to buy drugs or something?

They're talking about using these digital dollars instead of checks, for the unbanked and those without addresses at which they could receive a check, et c.

In California EBT recipients can cash their Cash aid at certain ATMs.

Which makes a log of when and where the card was used to receive cash, as well as provides digital imagery of who used it.

Checks don’t do this.

> Many, many Americans receive checks as payment which they then take to a service which will exchange the check for cash in hand, no bank account required. The check issuer has no idea where or how the money gets spent.

And they pay dearly for the privilege. I imagine the number of Americans who use check cashing for privacy is extremely small compared to the number who use it because they're in poverty and unbanked.

You're talking about payday loans versus cashing paychecks. It's usually a token fee to cash a check at a grocery store or free if you go to the bank that issued the check. Some people live by cash. Some businesses still operate on cash only basis.

Some, not most. And each continues to dwindle over time. Privacy is a human right, physical currency is not.

All you have to do is look at prisons as a good example, standard currency is tightly controlled, typically not very available to inmates and somewhat pointless to inmates anyway. So alternative currencies are used. Drugs, cigarettes, food, weapons, personal hygiene stuff, people, the list goes on.

Currency is only as meaningful as its usefulness to people. If a large number of people can't or won't use a currrency, they'll just find another. It wouldn't be the first time in history a majority currency became too inconvenient for a large number of people and alternatives were found.

It’s very likely the majority use the currency their government pays them in and requires citizens to pay taxes with. Alternate currencies will always exist, governed by the needs of market participants.

See this attitude is why I'm long on cryptocurrency.

When I get a check or ACH direct deposit, I can go to the ATM and get cash out of it and spend that cash, so while there is a record of "I got paid" and "I withdrew $200" (and "I paid my credit card bill, and here's what I bought with it"), for the things I buy with cash, there's no more record than that.

Can I do the same with digital dollars, or must it be spent directly out of the account?

I guess that's actually a practical question in general, independent of the privacy concern. Can you go to any member bank and withdraw cash?

I have always been a huge fan of the idea of the Fed providing deposit accounts directly to citizens, at no cost. Banking should be a utility, not a for profit business (you can carve off lending and investments to for profit entities that do this, separate form traditional banks), and you suddenly make the unbanked the banked (and nuke alternative finance providers that charge for services that should be free, check cashing and the like; "its expensive to be poor").

Your credit card data is already sold [1]. Your banking data is already sold [2]. Read the privacy notices you receive from your banks and credit cards to see when and to whom (these notices are required by law). Any transaction over $10k generates a CTR [3]. Any transactions that appear to be structuring are going to generate a SAR [4].

The solution, as always, is regulation, governance, and oversight, not outright turning down the idea. At the same time, the ability to turn your fiat into physical currency must always be preserved for privacy reasons; require the Fed issue debit cards and all ATMs accept them for dispensing hard currency.

[1] https://www.aclu.org/blog/privacy-technology/consumer-privac...

[2] https://www.courthousenews.com/banks-profit-from-selling-you...

[3] https://en.wikipedia.org/wiki/Currency_transaction_report

[4] https://en.wikipedia.org/wiki/Suspicious_activity_report

> Banking should be a utility, not a for profit business

100% agree. Just consider the overhead of the massive government policy infrastructure required to adequately support all of the banks which exist purely to turn a profit off of people through oftentimes usurious methods. There's no reason the federal government can't simply provide a bank run not-for-profit.

However, the Fed is not the federal government, it is a private corporation; so this is not the correct entity. Instead, the national bank you're suggesting would necessarily have replace the Fed with a fully transparent public institution.

You'll find that most times in history when a Western country tries to do this, the moneyed elites do not enjoy it.

I agree with most of what you're saying, but think the Fed is the ideal route for such a role if we presume that at some point in the future, they will acquire an outsized amount of financial assets similar to what central banks in other developed countries facing stagflation have done (Bank of Japan); it then becomes trivial to issue a citizen's dividend from those assets to citizen accounts. I'd settle for a national government-operated bank if I had to.

See https://news.ycombinator.com/item?id=22594458 for logistics.

The Fed was never designed to be a retail bank. And so you know, the Fed is a for-profit business.

Replace the Fed with a public entity that provides this service.

There's a reason the Fed is disjointed from the normal branches of government and does not answer to Congress or the President directly. You need that separation to keep the system from corrupting itself. If it were up to Congress, they'd print $100 trillion a year and spend until the system collapsed on itself. Some would argue we've already gotten to that point and we just have yet to see it play out in the economy. That may be true. There's a lot of very real systemic risk in the market right now. Financial mismanagement has destroyed many empires. America's system is vulnerable. Retail banking should be the last of the Fed's concerns at this time. It doesn't cost much, if anything, to open a checking account in the U.S. A lot of the unbanked either have illegal status and are keeping their funds off the books for good reason, or they choose to use cash for privacy reasons, which is totally valid.

If you want a non-profit bank, that's what credit unions are for. They've been around for decades.

> to keep the system from corrupting itself

Yes but the system always finds a way of corrupting itself.

Change is inevitable. How many governments were designed to support providing healthcare to their citizens but do so today? (Over 30)

Your premise is that a person needing money not to starve is worried if the government knows their money is going to food? Or rent? Or a student loan? Or a hospital bill?

I'll take at face value that this person does exist. They should take the digital payment and use it for a single or two lump sum payments they don't care about being tracked, like rent.

Is this really a Binary situation, where as soon as one or two not so private payments are trackable, now you can't use cash for the rest anymore? Maybe just don't use government stimulus for private things?

I'll buy this, if you're making a slippery slope argument about cash being completely obsoleted.

Why can't you have separate accounts, one for Fed dollars, one for checking? One is receive-only public, the other is private.

Why can’t we just keep cash and when we issue cash, we issue cash whether that’s an envelope of bills, or a direct deposit?

Agree with this. Humans/civilians are not government employees or public entities just by being alive. I'm probably not as big of an advocate for privacy as many of my peers, but trying to keep a public spending ledger of individual people is crossing a line.

There isn't enough cash to do that.

That's what I'll do...simply cash out the Fed account, and pay cash as I go.

Once fed "digital cash" dollars exist and can be used by everyone, including the unbanked, they have a plausible reason for discontinuing the use of "inconvenient" paper cash. After all, it's only used for money laundering, drugs, criminals, gambling, and prostitution. Who wants that stuff?!

Once that happens, there is no option whatsoever for trading with everyday people that does not involve complete surveillance, recorded and saved for all time.

Your movement at all times will then be reported in realtime to the federal police, provided you eat or buy fuel or water at any point during your travels (just as it is today if you use a payment card or contactless payment).

From 2010: https://www.wired.com/2010/12/realtime/

> they have a plausible reason for discontinuing the use of "inconvenient" paper cash. After all, it's only used for money laundering, drugs, criminals, gambling, and prostitution.

This excuse is already being used against the £50 note:

https://www.telegraph.co.uk/money/consumer-affairs/bothering...

https://www.bbc.com/news/business-48993008

I won't disagree with any of that..but, for example, if I pay rent in cash, I will cash out the Fed account to pay rent. The Fed account is simply a mechanism for me to cash out. But yeah, someday the bills themsleves will have RFID-like strands, and monetary privacy lost.