Fedcoin Rising?

giulioprisco writes US economists are considering a government-sponsored digital currency. On February 3, David Andolfatto, Vice President of the Federal Reserve Bank of St. Louis, wrote a blog post based on a presentation he gave at the International Workshop on P2P Financial Systems 2015 [YouTube video]. The title of the blog post is "Fedcoin: On the Desirability of a Government Cryptocurrency."

Comments

Of course

[Anonymous Coward]

So they have a system that allows you to pass around *coins as if they were US dollars (the exchange rate is pegged) but all the transactions are digitally tracked in real time? Fuck yeah the feds want that!

Re:Of course

[amiga3D]

Not only that but with a click of a mouse they can confiscate all your money. It'll be like you never had it at all.

Re:Of course

[rmdingler]

Unfortunately this is such a bad, outdated idea that the government will probably go for it.

We already have digital currency - those bits that record our current balances, etc in our bank accounts, etc. It's not like the bank takes physical money and moves it from one drawer to the other, or that when you pay with a credit card that the credit card company sends the merchant a wad of cash and some coins.

We do already have digital currency, and this is an incredibly poor idea.

What spawns such things from the government, you say? Why, they've seen the recent success of the homegrown crypto-currencies like the Bitcoin, and they want in because they confidently believe they should control all the money. The flaw in their venture is the basic lack of understanding of the principle tenet of Bitcoin: it is outside government meddling.

Brought to you by the same government

[MikeRT]

That arbitrarily seizes cash left and right because it is deposited in "structured deposits" to avoid a policy requiring the transaction information be logged in a government database. I'm sure this will be a real hit--with the IRS.

Not surprised

[bjdevil66]

If this actually replaced hard currency and became a widely accepted standard, the government would eventually introduce legislation to ban the usage of all non-government cryptocurrencies. I'm not sure what the argument will be ("we can't afford it anymore", "terrorists used cash to commit atrocity X", etc.) but it would fit in with the model of our current system (the dollar is the only legal, federal U.S. currency).

Also, from the article: Understanding this, it is unlikely that Fedcoin will be the preferred vehicle to finance illegal activities. -- This would cast an unfair, "guilty until proven innocent" suspicion upon anyone wishing to still use cash. And there's no way in hell I'd trust the government to not abuse the privacy issues. They wouldn't be able to control themselves with that info...

Re:Not surprised

[bill_mcgonigle]

I'm not sure what the argument will be

Same as for the current fiat currency - "we need to be able to print an unlimited amount of digital currency, but if anybody else does so it's counterfeiting, and your labor* is the collateral for paying back debts against creditors while we give away value to our politically connected friends. Because otherwise terrorists and child pornographers and Muslims."

A primary feature of the currently popular digital currencies is that the politicians can't manipulate it, and so the politicians will never propose one with those features - for the US, holding the world reserve currency is the source of a majority of its power vs. other nations, and it's how political favors are handed out at home (e.g. bankrupting the savings and loan system to benefit the 401(k) regime, driving money out of community savings and investment (stifling bank loans to new businesses, etc.) to benefit Wall Street and the big-box multinational political donors). The money gradient between concentrated and diffuse interests is what powers DC, and currency manipulation is what enables it.

* your labor, your children's labor, your grandchildren's labor, etc.

Re:Guy is a moron.

[Anonymous Coward]

> The one and ONLY value of a cryptocurrency is that it can be reliably traded secretly. There is simply NO other reason to use one.

1) Bitcoin is in no way secret. The blockchain (record of all transactions) is public.

2) There are many other values of cryptocurrency... the main one is that you can conduct electronic transactions (over distance, etc) via P2P transfers (without a middleman taking a cut).

Re:Yeah!

[westlake]

Now we're going to have a government-backed currency with a central bank that can control interest rates! Anyone can exchange it at will! Of course, the institutions that monitor these transactions are going to have to follow a set of regulations, and probably have some sort of government-backed insurance for deposits...

You say this like it is a bad thing.

Re:Ha!

[digsbo]

I'll give you a hint: It wouldn't be the one that's backed by a government that set up a system in which its existing currency lost 97% of its value since 1913, and is guaranteed to lose more because of stated policy going forward.