A high ranking official with the U.S. Federal Reserve has said that the institutional is “actively” considering the possibility of floating its own cryptocurrency. This is because there have been renewed calls for the Federal Reserve to do just this, as a way of preventing the possibility that the dollar’s current dominant status is undermined by other digital currencies.
According to Rob Kaplan, the President of the Federal Reserve Bank of Dallas during a business gathering in Texas:
“We have not at the Fed decided to pursue or drive to develop a digital currency, but it’s something we’re actively looking at and debating.”
Kaplan suggested at the event that the U.S. could quite possibly suffer unaffordable consequences if it happens that a different country’s government or even a private organization, develops a digital currency that becomes popularly adopted worldwide. Currently, the dollar is the most used and dominant currency in the world and because of this, most international transactions for more than a few decades, have been handled in dollars. Many governments including their central banks also have dollar reserves.
Kaplan has further said that if the U.S. loses the dollar’s current position, there’s a good enough chance of a $200 billion increase in interest rates.
Before now, the Chairman of the Federal Reserve, Jerome Powell, has also said that if Facebook’s Libra receives wide adoption, the dollar could also be displaced.
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