Members of the US Congress the French Hill (R-Arkansas) and Bill Foster (D-Illinois) have recommended the Federal Reserve regarding issuing a digital version of the US dollar. In a letter addressed to the Fed, they highlighted that the country’s currency is in long term danger due to the acceptance of digital fiat currency.
Sheila Bair, former president of the Federal Deposit Insurance Corporation (FDIC) had recommended Fed last year to take the digital currency ‘seriously’. She had been discussing this issue for quite a while. Since she had proved in calling the Global Financial Crisis with her worry on subprime contracts, it bodes well that we start turning to her on her most recent worry for the U.S.
Bair was questioned by Senator Cortez Masto at the Senate Banking Committee on September 25th which was known as “Encouraging Faster Payments in the U.S – Why in her declaration she prescribed the Federal Reserve to investigate the central bank digital currency standards, concerning matters such as cryptographic forms of money which are recorded on distributed ledger technology that could be utilized in the end by the general population.
The former president states in return that she believes that this innovation is developing at a quick rate and it is reasonable having a distributed ledger that all banks can obtain. And that it eliminates that need of a delegate –
“You don’t need a TCH, you don’t need centralized ledger that single point of failure, the digital transfer is from the sending bank to the receiving bank.”
In the above, she refers TCH to a Clearing House, which is a private sector non-profit system that functions on RTP- a real-time payments system. The 12 largest banks aid the RTP. Because of the position she had during the Global Financial Crisis, she had taken admiration from many and earned prestige and respect for predicting the crisis, perhaps it is said that’s why she pulled off how the distributed ledger technology didn’t need the support from the centralized ledgers so effectively. Bair went on to explain her offensive for the ledger technology that most of them didn’t trust the RTP and that the financial systems could be used as a monopoly without the Clearing House and the Federal Reserve.
At the Senate hearing, Bair’s testimony proved how she is ahead of the curve again, and that is so similar to how she attempted to warn other regulators of the Global Financial Crisis.