Possible US Central Bank Cryptocurrency Coming Soon! Vice President of Research, Federal Reserve Bank Hinted…
(By Glenford S. Robinson)
A US Federal Reserve Central Bank Cryptocurrency is a possibility according to Federal Reserve Bank, Vice President of Research, David Andolfatto. On August 29, 2018, the Vice President spoke at the “Dialogue with the Fed” forum on the topic of Blockchain, Cryptocurrencies, and Central Banks.
The Vice President stated that the common theme that relates to Blockchain, Cryptocurrencies, and Central Banks is Database Management. In terms of Bitcoin and other Blockchain-based digital currencies, this database management duty is the responsibility of the Cryptocurrency/Blockchain community.
So, it is very possible for the Federal Reserve Central Bank to have its own Cryptocurrency because all would be needed is for the Federal Reserve Central Bank to manage its own Cryptocurrency/Blockchain database, which is a very feasible and doable task.
Blockchain is the system or protocol that governs Cryptocurrencies and within this Blockchain network are groups of databases that feeds into one main database that is managed by the Blockchain community through transaction checks, confirmations, and verifications conducted by miners.
The Vice President made it clear that Bitcoin is an excellent innovation, building on ancient concepts that have been around from ancient times when local human communities/societies would participate in giving and receiving goods and services without the expectation of direct compensation.
The speaker demystified Blockchain by dissecting the technology and showing that Blockchain-supported Cryptocurrency is the digital version of a primitive form of communal record keeping that was used in moneyless societies in the past. So, Blockchain should be very familiar to all of us.
On the other hand, a Central Bank digital currency would be a delegated Cryptocurrency as opposed to a communal one. If anything, a Central Bank Cryptocurrency would be an economic improvement because such a Cryptocurrency would help to put a cap on inflation. In such setting, the Central Bank wouldn’t be needing to always print more money when the money supply runs low. In fact, there would be no such thing as money supply running low in a Federally delegated Cryptocurrency frame work or system.
Mr. Andolfatto implied that there is no reason why a Federally-managed Cryptocurrency Blockchain database couldn’t coexist with globally accepted Cryptocurrencies, and further stating that Cryptocurrencies can flourish in niche markets. There is definitely a need for Cryptocurrencies in niche markets. In fact, this is where the industry is heading. There will be a Crypto-token for every viable niche.
Federal Bank’s continued support of communal Blockchain Cryptocurrency is welcome because widespread use of Cryptocurrencies would eliminate counterfeiting, high auditing cost, legal disputes, conflicting records, and would promote fair and efficient outcomes.
With all that have been said here with respect to Cryptocurrency and the Federal Reserve Central Bank, it is clear that the Federal Reserve Central Bank is a strong supporter of Cryptocurrency as it is today, contrary to popular belief that the Central Bank opposes Cryptocurrency. Again, there is no evidence to support that the Federal Reserve Bank opposes Cryptocurrency. What we can be assured of however, is that the Securities and Exchange Commission (SEC) will do whatever it can to protect investors from Cryptocurrency frauds.
The current stance of the US Federal Reserve Central Bank Vice President David Andolfatto on Cryptocurrency is of mutual support; and believe it or not, the Vice President is a representative of his place of employment, (Federal Reserve Bank of St. Louis).
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After a brief welcome by Executive Vice President Julie L. Stackhouse, St. Louis Fed economist David Andolfatto talked about “demystifying” blockchain, which he called a form of communal recordkeeping. Andolfatto, a vice president of research, discussed: Why we need these types of database management systems. What sort of role they play in society.
I am a Clinical Lab Scientist, entrepreneur, investor and trader (stocks and Forex). I enjoy writing and publishing articles online.