- There’s “no point for them to do it,” said Alan Greenspan
- National currencies, the former Fed chairman said are backed by sovereign credit that no one else can offer
- This sovereign credit is “far in excess of anything Facebook can imagine,” Greenspan said
Alan Greenspan, former US Federal Reserve Chairman at Chinese finance magazine Caijing’s annual economic outlook conference said that there is no need for central banks to issue digital currency.
“There’s no point for them to do it,” Greenspan said on Tuesday.
While Greenspan doesn't see any point in launching a digital currency, the People’s Bank of China is pushing ahead for its own central bank-backed digital currency.
In early October, Philadelphia Federal Reserve President Patrick Harker said it is “inevitable” that the central banks will issue a digital currency. Though he is “in the minority” at the Fed, Harker said his staff is researching the issue.
Greenspan further pointed out that the national currencies printed by central banks are backed up by sovereign credit, that no other organization can offer.
“The fundamental sovereign credit of the United States is far in excess of anything Facebook can imagine,” he said.
The social media giant announced its digital currency project Libra earlier this year with key partnerships with major global payment processing companies. However, last month PayPal, Mastercard, Via, eBay, and Stripe dropped out the Libra Association amidst increasing scrutiny from the US lawmakers.
“This is not going to be a thing that spreads like a social network; this is going to be the work not of years, but of decades,” said Kevin Weil, VP of product at Calibra at Facebook.
Recently, Rohit Chopra, commissioner at the United States Federal Trade Commission argued for the need to launch the real-time payments system “FedNow Service” urgently.