Implementation Challenges of Central Bank Digital Currencies - A Blueprint for the Digital Dollar

As the world begins to shift towards technological efficiency, monetary policy is falling behind the curve of digitization; cash continues to decline as a percentage of transactions, is used to propel the underground economy, exacerbates financial inequity, and has huge policy costs. One proposed solution is Central Bank Digital Currencies (CBDCs), a digital token of a country's fiat currency that lives and grows on your smartphone, serving as a convenient and alternate form of payment for transactions in the economy. 87 countries are exploring digital currencies and 9 countries have fully launched a CBDC nationally, leaving the US behind other major economies in the move towards technological efficiency. Thus, I consider whether a central bank digital currency is feasible and desirable in the United States, and how we can use theory and practice to inform successful implementation. I consider the key arguments in the debate, including ethical considerations of privacy and equity as well as economic justifications like costs, efficiency, and digital networks. Weighing these arguments alongside a theoretical macroeconomic model, I recommend, with cautious optimism, a 7-fold plan for the implementation of a digital dollar over the next 10 years.