Key Takeaways
- Some parts of the CBDC vs. stablecoin debate are a “false choice,” says former CFTC Chairman.
- Digital dollar risks reinforcing financial surveillance, he added.
- Blockchain enables ‘smart money’ but regulatory clarity is critical, says Caroline D. Pham.
The perceived divide between central bank digital currencies (CBDCs) and stablecoins may be overstated, with key differences overshadowed by shared challenges around privacy and regulation, former U.S. Commodity Futures Trading Commission (CFTC) Chairman Chris Giancarlo said on Tuesday.
He also warned that the digital dollar could simply reapply existing financial surveillance laws without rebalancing privacy protections.
Digital Dollar: Sovereign vs Private Money
Speaking at the DC Blockchain Summit on March 17 during a panel titled “The CFTC Moment: What Market Structure Really Means,” Giancarlo said the debate often frames the two forms of digital money as competing alternatives when, in some respects, they are not.
“So there’s both short distinctions, and then there’s some areas where, in fact, it’s a false choice,” Giancarlo said.
He noted that CBDCs represent sovereign-backed money, while private companies issue stablecoins.
“Digital currency is a sovereign obligation of the sovereign as opposed to a stablecoin, which is an obligation of a corporate provider,” he said.
That distinction matters in times of crisis, he added, when trust shifts toward government-backed assets.
“In the hierarchy of money, a central bank instrument is better,” he added.
At the same time, Giancarlo argued that innovation in digital money should remain driven by the private sector.
“Only the private sector can do the kind of innovation that’s going to garner public support for digital money,” he said.
A “False Choice”
However, he challenged the common assumption that stablecoins offer stronger privacy protections than CBDCs, calling that view misleading.
“Many people say, ‘Well, CBDC, bad for privacy. Stablecoin is good for privacy. But sadly, that’s a false choice,” Giancarlo said.
“There are no privacy protections in the GENIUS Act. Sadly, in fact, a stablecoin means you’ll have no privacy in the stablecoin, either from corporates or from the government, because it’s all subject to the Bank Secrecy Act.”
He criticized the U.S. Bank Secrecy Act as fundamentally surveillance-oriented.
“The dirty little secret is that the Bank Secrecy Act is not about secrecy. It’s about surveillance,” he said.
Giancarlo added that policymakers missed an opportunity to revisit privacy standards as financial systems digitize.
“The missed opportunity is we didn’t take the opportunity to reconsider the Bank Secrecy Act for a new digital era,” he said.
Digital Dollar’s Privacy and Surveillance Concerns
Giancarlo said the shift to digital money presents a critical moment to reassess the balance between privacy and law enforcement, arguing that current frameworks have failed to keep pace with technological change.
“As a fan of digital network technology, who’s been at this now for 10 years, we really need to find a moment where we need to say, what’s the rebalancing of privacy and law enforcement in a digital era?” he said.
He pointed to long-standing legal traditions around privacy, stating modern financial surveillance departs from those principles.
“You know, civilized society has been trying to get the balance right between law enforcement and privacy, going back to Magna Carta… you’re entitled to privacy behind your front door and in your private things unless there’s probable cause of law breaking,” he said.
Adding: “… in which case, we’ve accepted the notion that the government has the right to break down your door if they’ve got probable cause. And that’s the balance.”
Giancarlo said existing financial laws have eroded that balance by enabling broad monitoring of transactions.
“Unfortunately, since the Bank Secrecy Act has been in effect, there’s no longer a presumption of innocence,” he said.
“The government surveils our financial transactions in case we do something wrong, not because they have reason to believe we do something wrong.”
He warned that digitization risks entrenching those practices rather than reforming them.
“And so the missed opportunity, as we think about taking the dollar from its analog state to a digital network state, is we’re not rebalancing,” he said.
“We’re actually just reapplying the Bank Secrecy Act on top of the digital dollar, and that’s the missed opportunity.”
Rise of ‘Smart Money’
Building on Giancarlo’s comments on digital money and market structure, Caroline D. Pham, Chief Legal Officer and Chief Administrative Officer at MoonPay, pointed to the broader transformation enabled by blockchain technology.
“Look, I think what’s so important about what we’re seeing with Blockchain technology is that now everything can be smart. We have smart homes. We have smart watches. Why don’t we have smart money?” Pham said.
She said programmable money — including stablecoins and tokenized deposits — could improve efficiency and accessibility.
“And that is really what blockchain technology is enabling, is the ability to have smart, programmable money.”
She added that such innovations could expand access to financial systems globally.
“And it’s really going to help to really bring financial inclusion to everywhere in the world, not just if you’re in a developed economy that has a well-developed banking and payments infrastructure.”
Pham also highlighted the importance of legal clarity in determining regulatory oversight, particularly for derivatives markets.
“It’s really important that we look at the actual instrument, like the actual contract,” she said, noting that the CFTC’s jurisdiction depends on whether a product qualifies as a swap.
Adding: “If it’s a swap, the CFTC has exclusive jurisdiction. It is federally preempted. Only the CFTC can regulate swaps in the United States.”
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
