Lawmakers and Federal Reserve officials are so concerned about Facebook’s plans to launch a new digital currency that they’re contemplating a novel response — having the central bank create a competitor.Momentum is building for an idea that was once considered outlandish — a U.S. government-run virtual currency that would replace physical cash, a dramatic move that could discourage major companies like Facebook from creating their own digital coins.
The idea of a government-sponsored digital currency has been around for quite some time. See, for example, the unconfirmed rumors reported in a March, 2013 discussion on the Bitcointalk forum titled “Fedcoin: A centrally-issued alternative to peer-to-peer currencies.”
Now U.S. economists are taking it seriously.
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. The title of the blog post is “Fedcoin: On the Desirability of a Government Cryptocurrency.”
