Former US Federal Reserve Governor believes in central cryptocurrency

Former Governor Kevin Warsh believes in the potential of cryptocurrencies for central banks. Compared to the New York Times, he praised the innovative power that emanated from them. According to Warsh, while digital currencies are currently experiencing large fluctuations in value, they could be exploited more vigorously through more rigorous research. He also brought back the publication of a separate cryptocurrency of the US central bank back into play. If he were still a member of that leadership, he would bring such a "Fedcoin" on the way.

Mostly it's the voices that sound the loudest. Kevin Marsh, who served from 2006 to 2011 as one of the twelve governors of the US Federal Reserve, also showed this last week. Speaking to the New York Times, he demanded more commitment from the US Central Bank on crypto currencies on Friday, in defiance of the current direction.

One such option would be the release of a cryptocurrency centrally controlled by the US authorities. With this, Warsh brings back the "Fedcoin", inspired from ranks of the New York Federal Reserve last year. The current central bank chairman Jerome Powell, however, holds little of cryptocurrencies.

Had he still been part of the leadership of the Washington Authority, he would have long drawn attention to "the Fed issuing a Fedcoin," Warsh said, "Not that this cash displaces and replaces it, but it would be an effective way in the case of the monetary policy in the next crisis. "

According to Warsh, the world of central banks divide into those who find cryptocurrencies either "cool" or "risky". Nevertheless, central banks would have to make much more determined efforts and use their potential for themselves.

In order for this to succeed and digital currencies become reliable means of payment, it would also be necessary to adapt the existing legal framework and integrate crypto currencies into its system.

"Congress has given the central bank monopoly over money. And if the next generation of cryptocurrencies looks more like money and less like gold - and there will be less volatility associated with them, so that they are not purely speculative investments, but reliable means of payment - I would not, in principle, want someone to monopolize me takes "

predicts the 48-year-old coming control claims of the US Federal Reserve.

Back in March, Stanford University's current lecturer featured Bitcoin in a guest article in the Wall Street Journal. Nevertheless, he had warned that all crypto currencies could end up "worthless" in the future.

US Federal Reserve wants to use Blockchain for payments

In addition to cryptocurrencies, Warsh also highlighted the potential of the blockchain for central bank activity in a report released this week. As with interbank transactions, there are a variety of application areas for which the US Federal Reserve could use the technology.

Unlike cryptocurrencies, this attitude does not contradict his former employer. Because the current head of the Federal Reserve and former Warsh competitor Powell has been in the past several times positive about distributed ledger technologies.

"At the moment, we understand the blockchain as something that can have a vital application in the payments industry"

so Powell.

Until last year Warsh himself was considered a hot contender for the post of chairman of the central bank. US President Trump, whom he had advised before his election as President in economic matters, but his candidacy was thorn in the eye. In his opinion, Warsh was "too young to be taken seriously by the markets in the event of a renewed financial crisis."

Observers did not seem to agree with this justification, as Warsh had already shared the fate of the central bank during the 2008 financial crisis.