US Federal Bank: National Cryptocurrency To Solve Problems Of Dollar
The release of the US domestic cryptocurrency can solve the problems the US dollar faces as a global reserve currency, the vice president of the research division at the Federal Reserve Bank of St. Louis stated while responding to users’ questions on Twitter.
David Andolfatto has been an economist at one of the 12 US federal banks since 2009. He also studies currencies, including digital ones. The expert said that the national cryptocurrency can solve the Triffin dilemma, which the dollar is currently suffering.
The paradox is that being an international means of payment and a depository for most countries, the dollar must be in short supply in the United States. According to Andolfatto, the issuance of a national cryptocurrency will eliminate this dilemma.
The Triffin Dilemma refers to the double-edged sword of possessing a currency that serves as the world reserve currency. If a private cryptocurrency were to replace a given world reserve currency, this would eliminate the dilemma for that currency https://t.co/NgzPLcWbMM— St. Louis Fed (@stlouisfed) October 2, 2018
The economist admits that digital money can replace less convenient paper ones and valuable metals, but he does not believe that this should necessarily happen. Also Andolfatto stated that the Federal Bank considers tokens as foreign currencies, so it will not use or manage such assets.
Users inquired whether the dollar will be transferred to blockchain to become digital money in future. As the economist responded, the bank does not need a decentralized solution to track dollar transactions, as the state already uses the electronic system Fedwire.
It's hard to say what will happen in the long term future, but my guess would be no because there's no need for decentralized consensus based record keeping for the USD. Fedwire, for example, works very well https://t.co/FihBMXq76W— St. Louis Fed (@stlouisfed) October 2, 2018
David Andolfatto said that blockchain can be useful for data management, but, in his opinion, it is better to use the centralized approach in payment systems, making quick transfers via direct communication lines.
Earlier, the list of top 10 US universities to study blockchain was published.