ARTICLE

The War On Cash Continues - Fedcoin Digital Currency Could Kill Cash

News Image By Tyler Durden/Activist Post October 09, 2021
Share this article:

For years now, and in response to similar projects at central banks in Europe and - more importantly - China with the PBOC, the Fed has been hemming and hawing about whether to take the possibility of creating a "FedCoin" more seriously.

Senior officials have been pretty tetchy about carefully weighing the "pros and cons" of a system that would, in theory, enable the Fed to deposit money directly into the 'digital wallets' of regular Americans, a power that could ultimately render the entire private banking system obsolete.

And so, as we wait for the Fed to take the next tenuous steps toward developing a CBDC, WSJ has offered yet another leak confirming that the Fed is finally ready to release its official 'report' on CBDCs, which will serve as the start of a long-promised "review" of the pros and cons of CBDCs that's supposed to allow for public feedback. 


Some more compassionate proponents of a FedCoin argue it could create a kind of "parallel" system where the Fed would be able to directly and easily dispense FedCoins to the public (the ideal of "helicopter money", finally achieved), without relying on banks or the IRS as intermediaries, which could make delivering this type of aid faster and cheaper. 

It could also offer a more "efficient" avenue for distributing welfare or financial aid (that is, unless the Fed chose to distribute FedCoin through financial intermediaries instead of sending them directly from the Fed to the American people.

It could also be the greatest weapon in the war to make cash obsolete.

But within the Fed, the drive to create a "FedCoin" is primarily rooted in the fear that not having a central bank digital currency could potentially threaten the dollar's dominance in the global financial system. In that respect, it's like any other technological arms race.

Here's more on that from Fed Governor Lael Brainard: "It's just very hard for me to imagine that the US, given the status of the dollar as a dominant currency in international payments, wouldn't come to the table in that circumstance with a similar kind of an offering," she said.

Chairman Powell has done his best to push for caution, arguing that it's more important to "get it right" than be "first to market". Put another way: who cares if the PBOC roles out the "e-RMB" first? The dollar's role in the global financial system is much greater, which means the US is obligated to proceed with more trepidation.

Powell and others have said repeatedly that the Fed's research so far has been early and exploratory. Powell has also pointed to the fact that many Americans still use and prefer cash. Most importantly, Powell has addressed concerns that a CBDC would effectively allow the Fed to monitor the finances of every American.

"It's our obligation to do the work both on technology and on public policy to form a basis for making an informed decision," he said last month.

Others on the Fed, including Randy Quarles, the Fed's financial regulation guy, has slammed CBDCs as a fad, noting that the US dollar is already "highly digitized". A report from the Philly Fed recently warned that a CBDC could also destabilize the financial system if everybody were to pull their digital dollars from markets, mutual funds and banks.

But enough of what senior Fed officials are saying: pretty soon, it will be the "public's" turn, as the Fed has promised to solicit public comment during its review.

Originally published at Activist Post - reposted with permission.




Other News

August 06, 2022Disturbing Symbolism As Commonwealth Games Recreate Worship Of Baal

During the opening ceremony of the Commonwealth Games in Birmingham, England a giant mechanical bull with glowing red eyes was rolled out ...

August 06, 2022Why The Double Standard From Health Officials On MonkeyPox?

The difference between the reaction to COVID and the reaction to monkeypox is not a revelation, per se--but it is certainly a reminder of ...

August 06, 2022Israel Leading The Way To Cashless Digital Surveillance State

Israel has just banned using cash for purchases larger than $1,700 and instead requires residents to use digital transfers or debit transa...

August 06, 2022With All Eyes On China, The North Korean Threat Continues To Grow

In January 2022 alone, North Korea launched a record 11 missiles, including two hypersonic missiles and the first firing since 2017 of a H...

August 04, 2022Here Come The Layoffs - Big Companies Preparing For Recession With Job Cuts

When the economy slows down, layoffs inevitably happen. We witnessed this on a very large scale in 2008 and 2009, and now it is happening...

August 04, 2022The Parable Of The Cancer Pill & The Modern Church

The contemporary gospel presents Jesus as something who adds good things to you but requires nothing of you. 'The Parable Of The Cancer Pi...

August 04, 2022Veteran Arrested For "Causing Anxiety" To Trans Activists With Social Media Post

That's a middle-aged man, being arrested by police, for criticizing the trans movement on Twitter-and not a peep from the media so far unt...

Get Breaking News