By Ramiro Silva Jr – 06/13/2018
Ramiro Silva Jr is Trader and ICO Analyst in CrytoTrader.
The Federal Reserve System of the United States, Fed, is the North American regulatory agency, responsible for the printing and circulation of the dollar. It has the same function as our Central Bank, but, unlike what happens here, it is a private company. According to the site usinflationcalculator.com the US dollar has been losing value since 1913, reaching an incredible 2736% devaluation in 2017. Countries like China and Russia work incessantly to overthrow the hegemony of the American currency and since 2009 has Bitcoin’s help in this endeavor.
Thinking about it the Fed resorts to the popular maxim: If you can not with it, join it. In this scenario, FedCoin is being created, a crypto-based blockchain that intends to replace the current paper currency dollar.
Over the centuries man has created many ways to market his products, started with the barter, then the gold until we reach the current system of paper money, known as FIAT. This system still perpetuates despite its inflationary propensity, since all governments, through their regulatory agencies, simply print more money without any kind of burden, without increasing reserves of that country or without increasing the productive capacity of that nation. With the US dollar it was no different and everyone recognizes that he is headed for disappearance, as has happened with other fiat that no longer exist.
Going against Satoshi Nakamoto’s WhitePaper, the Fed aims to create a distributed, but not decentralized, currency. Unlike Bitcoin that has the characteristics of having your transactions validated by decentralized network nodes, FedCoin will have these node validations centralized and controlled by central banks and commercial entities. In this mold FedCoin will be very convenient for banks all over the world. It will be the union of the useful (blockchain) to the pleasant (centralized). This in the view of the bankers, of course!
See the list of advantages for governments:
- A popular currency, without frontiers, supported by local governments.
- End of tax avoidance. Bodies like the IRS will know exactly how much you have, how you spend and how much you earn.
- Full control over the issue of coins in the blockchain.
- End of counterfeit coins.
The biggest problem faced by Fedcoin will be cultural change, because people who know and favor Bitcoin and the other criptomoedas are mostly technology enthusiasts and are against centralized projects. They just try to escape from state control. The financial system of the planet is condemned. There is no doubt. Paper money will be gradually replaced by digital money based on blockchain technology.
In the opinion of the winner of the Nobel Prize in Economics, Joseph Stiglitz “The United States can and should migrate to a 100% digital currency and eliminate the paper dollar”