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The US Federal Reserve begins looking into its own digital c

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The US Federal Reserve begins looking into its own digital c

Unread postby BrianC » Fri 21 May 2021, 17:04:38

The US Federal Reserve begins looking into its own digital currency
https://www.engadget.com/us-federal-res ... 34039.html
The US Federal Reserve took a step toward developing a digital currency as it announced plans to publish a research paper on the subject. The aim is to gather public comment and get the US play a "leading role" in the development of international standards, said Fed chairman Jerome Powell in a video message.

"To help stimulate broad conversation, the Federal Reserve Board will issue a discussion paper this summer outlining our current thinking on digital payments, with a particular focus on the benefits and risks associated with CBDC in the U.S. context," Powell said. "As part of this process, we will ask for public comment on issues related to payments, financial inclusion, data privacy, and information security."

The announcement takes the concept of a "digital dollar" from a small research project into something potentially larger. The Fed aims to explore how "central bank digital currencies" or CBDCs could fit into the US banking system.

At the same time, the Fed is likely trying to accelerate work toward a potential US digital currency as other nations, particularly China, are farther along. Last December, China announced that select users could spend digital yuan given out in a lottery-type experiment. Digital currency is seen as a way for a China to not just a way to bolster its own monetary system, but as a tool for soft power internationally.

To that end, Powell emphasized that while the US hasn't come to any conclusions on a digital dollar, "we expect to play a leading role in developing international standards for CBDBs," he said. That make take some time, however, as he added that the decision will require "careful thought and analysis" from the public and elected officials.
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Re: The US Federal Reserve begins looking into its own digit

Unread postby Newfie » Sat 22 May 2021, 09:18:41

Welcome aboard Brian.

I wonder what they will base the currency on. Bitcoin is based upon an algorithm, which makes it more tangible than a US dollar which is based not much.

It could he a retrenchment towards some “standard” (gold standard, algorithm standard) or it could be just more imaginary numbers.
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Re: The US Federal Reserve begins looking into its own digit

Unread postby Outcast_Searcher » Sun 23 May 2021, 13:57:08

Newfie wrote:I wonder what they will base the currency on. Bitcoin is based upon an algorithm, which makes it more tangible than a US dollar which is based not much.

It could he a retrenchment towards some “standard” (gold standard, algorithm standard) or it could be just more imaginary numbers.

I've read some articles on what the Fed has been doing, re a US stablecoin. At least it is carefully looking before leaping, so that's a start.

A key issue will be whether this is primarily about making instant purchases using "Fedcoin" or whatever it will be called, instant, safe, convenient, reliable, etc. -- or whether removing the complete FIAT nature of the US currency unit will be a part of it.

At the end of the day, I don't think the federal government will be willing to give up the money printing power it has (and how much short term power that gives key federal politicians) without a MAJOR fight. (But if we ever DID have a major hyper-inflationary dollar/debt "collapse", perhaps a Fedcoin which IS strictly limited, like BTC, could be the response, if implemented in a way the public could trust.)

So if they don't remove the "can make an infinite number of them" problem with fiat, I don't think it means much more than one no longer needs to wait 3 days for an ACH transaction to clear (or spend the fee and go through the hassle of making a bank wire transfer happen, and that's STILL not instantaneous as I understand it).

And there are a lot of hurdles for Fedcoin, et al. So everyone will need a digitial wallat, will need that to be completely reliable and ubiquitous technology. Hack proof, idiot proof, etc. Will it be insured against loss? There are a tremendous number of serious questions, and plenty of hurdles, before this would happen.

Oh, and would they then ban other crypto-currencies? Would they NEED to, as long as they are confident than can tax them, and track them against serious abuse by (at least) large scale criminals, if not all criminals?

I think it's VERY early days yet to seriously ponder what sorts of answers will be given to quite a few key questions on various issues.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: The US Federal Reserve begins looking into its own digit

Unread postby Newfie » Mon 24 May 2021, 17:19:15

Thanks for that answer.
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