A CBDC could intrude on the privacy of users and harm banks while providing few benefits otherwise, Bowman said in a speech.
"We must ensure that consumer data privacy protections embedded in today's payment systems continue and are extended into future systems," she said in prepared remarks at Georgetown University.
For the past few years, Fed officials have been studying whether to join a handful of other central banks to implement its own type of cryptocurrency. AIn her remarks, Bowman addressed most of the common arguments — in particular the opportunities a CBDC could present for those without access to traditional banking activities, and the importance of catching up to the Fed's global counterparts that have already implemented digital currencies.
"Approximately one-third cited a lack of trust in banks as the reason for not having a bank account," Bowman said. "I think it is unlikely that this group would find the government somehow more trustworthy than highly regulated banks." However, she said an interest-bearing Fed digital dollar could provide harmful competition for banks, limiting their ability to lend.
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