Crypto is a rebel child born out of the chaos of 2008 financial crisis, and precisely for this reason banks, central banks and governments who were seen as the reason for the crisis were kept away. Now given this fact, imagine trying to create a central bank for crypto. Sounds crazy, right? Well, there actually there is such a project, and it is no joke. Stephen Moore, who was nominated by the president of the US to the post of Federal Reserve board member has joined the project.
Stephen Moore
Stephen Moore has an interesting past considering the fact that he was nominated to be in the Federal Reserve. Stephen Moore is an American writer and television commentator on economic issues. He was born on February 16, 1960, and has no academic background in economics. He has authored a number of books including how Barack Obama is bankrupting American economy. Moore’s columns have appeared in outlets such as the Wall Street Journal, The Washington Times, The Weekly Standard and National Review. He has even served as a member of the Wall Street Journal editorial board. He is currently a visiting professor at the heritage foundation.
Withdrawal
Moore, like all nominations by Trump, has faced a lot of backlash from both the house and senate. Due to this, the president was finally forced to withdraw his plan to nominate Moore. There are a few issues which were first reported by the Guardian, especially with his finances. In 2012, Moore was found in contempt of court when he failed to pay his alimony of $300,000. Also, the IRS is investigating him for $75,000 unpaid taxes. His lack of academic background was also an issue. All of this culminated in a number of Republican Senators indicating to the president that they will not vote in of Moore. This forced the president to withdraw Moore’s name from the nomination.
Decentral bank
“Decentral,” as it is known, will attempt to perform Fed like duties in terms of regulating the supply of crypto in the same way the Fed controls the supply of money for the U.S. economy, they contend. It will exchange its own new token for other cryptos; the supply of the new cryptocurrency will be tied to the value of the dollar or some other “stable” valuation method and will be strictly controlled by an algorithm. The decentral bank has a 3 token system currency, decentral bonds(DBB) and decentral shares (DBB). Currency is a token printed by the network with variable supply, also the value of each token is pegged at $1/token. DBS tokens are like having shares in FED. This allows the holder to vote in governance. DBB acts like a Digital debt instrument just like treasury bonds, and each one of them will have a maturity date, face value, and interest rate.
The biggest challenge faced by the project is, how to make the strongly anti-establishment crypto enthusiasts to accept the idea of a crypto central bank. Also, there is the issue of lack of authority and jurisdiction. The reason why central banks can enforce their policies is that they can enforce it through the power of government machinery. Another problem they face is the lack of control over the generation of new crypto. Most cryptos have a mechanism by which new coins are issued but it is fixed or keeps changing at a fixed rate which cannot be centrally changed. This is unlike central banks who can print or stop printing money as they wish, although a sort of lender of last resort is actually a good idea even for crypto.
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