Former Fed Chair Alan Greenspan said Tuesday that central banks do not need to issue digital currency. It’s useless for them to do it. He said that at Caijing’s annual economic prospects conference.
12 November 2019, AtoZMarkets – Greenspan pointed out that national currencies are supported by sovereign credit. That no other organization can offer. The fundamental sovereign credit of the United States far exceeds anything that Facebook can imagine, he said.
Fed Against Central Bank Digital Currency
The social networking company made waves earlier this year in announcing plans for a cryptocurrency project called Libra. That had key partnerships with major global payment processors. However, last month, Visa, Mastercard, PayPal, Stripe, and eBay said they were abandoning the coalition behind Libra. Because the US government was watching them more closely.
Meanwhile, the People’s Bank of China has continued its work on its digital currency. But it is unclear when it will be published. Philadelphia Federal Reserve Chairman Patrick Harker said in early October that it is inevitable. That central banks, including the Fed, are issuing digital currency. He said his point of view was “minor” to the Fed. But his staff was researching the issue.
Digital currencies caught the eye of the world in 2017. At the time, the price of bitcoin rose from a few hundred US dollars to nearly $ 20,000. Many technology enthusiasts of the underlying bitcoin blockchain claim that its merits lie in its decentralized system. That contradicts the central control of an institution.
In a time of increasing Sino-US tension, China’s central bank is possible to become the first major global economy to launch a central bank digital currency. Meanwhile, Tunisia has recently embarked on the process of digitizing the dinar. And it plans to issue a CBDC on paper on a clustered network jointly. That also managed with a Russian technology startup.
In October, members of the US House of Representatives Financial Services Committee sent a letter to outgoing Fed Chairman Jerome Powell. Also, it asked if it was possible to issue a USD CBDC. Legislators have argued that the Fed has both the ability and the mandate to establish a more reliable, more flexible, and stable monetary and financial system by developing a digital dollar.
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