Ex-FED Chair Says Cryptocurrencies Shouldn’t be Issued by Central Banks
Alan Greenspan, former FED chairman who served for five consecutive terms is not of the idea about the United States Federal reserve issuing a digital currency. The American economist who served as the FED chair from 1987 to 2006, thinks there is no point for central banks to launch their digital tokens according to a report by CNBC.
“There’s no point for them to do it,” Greenspan said at Caijing’s annual economic outlook conference that took place in Beijing.
According to Greenspan, national currencies are backed by all the financial resources of a country, also known as sovereign credit, and central banks won’t ever be able to match that.
“The fundamental sovereign credit of the United States is far in excess of anything Facebook can imagine,” Greenspan added.
However, it seems a little confusing for Greenspan talking about central bank digital currencies and afterward referencing facebook.
Central Bank Digital Currency Defined
Moreover, the central bank digital currency can be one of two things; first, it could be a digital representation of traditional currency, say the US dollar convertible for cash or fiat. Secondly, it can be a bank’s token. Let’s say ING coin, or ABN Amro tokens for example, which can only be used with that bank.
Additionally, the above two explanations are nothing like Facebook's Libra project. Based on reports and the Libra whitepaper, Libra will be a multi-asset fiat backed stablecoin of a kind.
Ideally, in any case that Greenspan used the term central bank digital currency to refer to any centrally backed cryptocurrency project; then he might have a point. Online banking has provided us the virtualization of our traditional money. Additionally, it lets us transact and send money to family and friends easily. Cryptocurrencies, say Bitcoin, provides us with an alternative censorship resistance exchange of value.
In conclusion, Greenspan is right about this. There is no point in central banks issuing cryptocurrencies. More importantly, they seem like a way to end the use of physical money; and monitor our transaction habits more so than they already do.
About The Author
Mary BrendahMy first love is music – then goes writing. I don’t write fiction, I analyze bulls and bears in markets. I call it my jungle, the digital jungle of crypto and chains.
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