- Kevin Warsh says FedCoin deserves special consideration.
- He said this would bring legal activities into a digital coin.
United States: According to a report from the New York Times on 4th May, Kevin Warsh, former governor of the Federal Reserve Bank (Fed) states that the creation of the federal cryptocurrency, FedCoin, so as to “bring legal activities into a digital coin” deserves serious consideration.
Kevin, an American financier who governed Fed from 2006 to 2011, stated that had he returned to the Fed, he would have started a team “to think about the Fed creating FedCoin, where we would bring legal activities into a digital coin.” Kevin stated:
“Not that it would supplant and replace cash, but it would be a pretty effective way when the next crisis happens for us to maybe conduct monetary policy.”
Kevin stated that “most central banks have a view that these crypto-assets are clever, like guys in the garage did it and it’s kind of cool, or risky,” considering the widespread fraud likelihood of investors losing funds. Kevin reportedly added that blockchain tech would be of great benefit to Fed in terms of the payment systems it operates, easily enabling the inter-bank transfer of trillions of dollars.
Jerome Powell said that the Federal Reserve Bank is actually looking at blockchain “as something that may have significant applications in the wholesale payments part of the economy.”
Kevin said that if people really believe to some extent that it is the future of money, then central banks should consider cryptocurrencies as more than just an innovation:
“Congress gave the Fed a monopoly over money. And if the next generation of cryptocurrencies look more like money and less like gold — and have less volatility associated with them so they would be not just a speculative asset but could be a reliable unit of account — as a purely defensive matter I wouldn’t want somebody to take that monopoly from me.”
Cryptona.co reported in March that some central banks are already considering the potential of blockchain technology for transforming securities transactions. For instance, the Bank of England declared it was undertaking a proof-of-concept study to understand whether the renewed Real Time Gross Settlement (RTGS) service could be capable of interacting with blockchain. The European Central Bank conducted research with the Bank of Japan on blockchain’s potential for transforming securities settlements. Recently, South Korea’s central bank declared it was looking into the application of cryptocurrencies and blockchain for its project for a “cashless society.”