Double Standards: Fed to Consider Own Crypto Launch
The US Federal Reserve is considering the possibility and prospects of launching its own digital currency, its future design, and potential legal complications said department head, Lael Brainard. According to her, the digitalization of the payment system will increase its value and efficiency at a lower cost, reports Reuters.
The head of the Federal Reserve, Lael Brainard, spoke about the advantages of creating a payment system on the blockchain and the risks associated with the increase in the amount of digital money.
“The Fed conducts research and experiments related to distributed ledger technology and considers the potential for using digital currencies, including the potential for issuing cryptocurrencies of the central bank. We also work with other central banks to improve our understanding of digital money,” explained Brainard.
She added that the risks associated with the increase in the number of private digital payment systems, including the Facebook Libra blockchain project, are taken into account. Previously, Brainard criticized the Libra project by pointing out many negative factors. According to her, Libra combines an active user base, representing more than a third of the world’s population, with the issue of private currency, which is opaque to a basket of currencies. At the same time, the existing monetary system has its own advantages, says a member of the Fed board. She noted that any global payment system must comply with high legal and regulatory standards in order to be eligible for launch.
Some of the new players are outside the regulatory framework of the financial system, and their cryptocurrencies can cause problems regarding illegal financing, confidentiality, financial stability, and the impact on the state’s monetary policy, the head of the Fed explained.
Last year, the US Treasury Secretary, Steven Mnuchin, said that the country is not developing its cryptocurrency, and it will not be released in the next five years. The head of the department also emphasized that it is necessary to exclude the possibility of money laundering and terrorist financing using Libra stablecoin.