Fed-coin is coming, why blockchains like EOS matter.
Market pressures ebb and flow, as the crypto market shows us how easily it can often reach soaring all-time highs, which can then be abruptly followed by dramatic pullbacks, like the one we have recently experienced. If you’ve been in the crypto game for a while, this won’t come as a surprise, but for crypto newcomers, this level of volatility is likely to be both surprising and frightening, and as a result, it may make some newly minted crypto enthusiasts skeptical about whether crypto has any real long-term potential. In this video, I will go over a recent article I read titled “The Fed this summer will take another step in developing digital currency,” and I will insert my opinion on why this is significant for cryptocurrencies like EOS and others.
The source article can be found in the link below, so let’s get started.
To paraphrase the article begins with, as part of its ongoing attempts to create its own digital currency, the Federal Reserve said that it would issue a research paper this summer that will examine the possibility of doing so. The Federal Reserve, despite the fact that it has not announced any particular intentions regarding the currency, Chairman Jerome Powell highlighted the advancement of payments technology and said that the Fed has been “actively watching and reacting” to such advancements. According to Powell, in a video message that accompanied the announcement, “the effective functioning of our economy requires that people have faith and confidence not only in the dollar, but also in the payment networks, banks, and other payment service providers that allow money to flow on a daily basis.”
Specifically, he said, “Our emphasis is on maintaining a secure and efficient payment system that offers wide advantages to American families and companies while also welcoming innovation.” What is driving central banks across the globe to get involved with digital currencies? Officials from the Federal Reserve have stressed the significance of getting the issue of a central bank digital currency right rather than competing with its worldwide counterparts.
However, the actions of a number of nations, most notably China, in the central bank digital currency (CBDC) sector have heightened the debate about how aggressively the Federal Reserve should go. Concerns have been raised about China’s development, with some speculating that it might threaten the dollar’s status as the global reserve currency. According to David Treat, head of Accenture’s blockchain group, which is conducting a public-private research effort into CBDCs, “it’s going to take some time to execute it properly.” It will take four to five years to bring the technology to widespread availability and use, and there will be a lot of learning that must take place between now and then to ensure that the way it is implemented is consistent with each country’s societal norms and regulations.
However, he noted that digital currencies such as bitcoin are very inefficient payment methods. Tied-to-specific-currencies stable-coins offer additional benefits.
Today, CBDCs may be built to be accessed by the general public, the Fed has studied payments systems for a long time and will likely introduce something in 2023. They say it will likely improve the situation of the unbanked, who do not have bank accounts.
While digital currencies may provide another avenue for central banks to improve payments, a number of implementation issues have stymied progress. The Federal Reserve says they are dedicated to hearing from a wide variety of perspectives on this subject before making any decisions on whether to go ahead with a U.S. CBDC, Powell said.
Well, there you have it. The fact of the matter is, despite the ongoing worldwide volatility of cryptocurrencies in general, the United States Federal Reserve is moving towards incorporating their own version of a centralized digital currency based on blockchain technology. Even though it may not seem like it at first glance, this is significant because it legitimizes the underlying technology of cryptocurrencies in a way that nothing else could, because how difficult will it be to maintain the narrative that cryptocurrencies have no value in the future, when future federal reserve digital currencies will be based on blockchain technology? Whether people want to accept it or not, cryptocurrencies are here to stay, and this new asset class is just now beginning to take over, which is why, in my opinion, the federal reserve is actively trying to incorporate blockchain technology into their own variant, in order to maintain market share.
I was reminded of the five stages of grief, when I first read this article, which are: denial, anger, bargaining, depression and acceptance. It’s pretty clear to me that the US Federal Reserve is somewhere between bargaining and depression, as they realize they won’t be able to stop the global adoption of crypto assets, and so they’re scrambling to maintain their relevance by trying to co-opt the technology and adopting it for their own purposes, but in my opinion, this is a bad idea for them. But this doesn’t mean they won’t try anyways.
Time will tell, but I remain optimistic that crypto has already won. The reason for this is that programmable cryptocurrencies have shown us that automation and trusted decentralized algorithms can replace centralized authoritarian institutions of financial global currency markets. Now there exist far better ways of doing things, and now there is no real reason for there to be a central authority within certain financial sectors, when they can so easily be replaced with trusted decentralized blockchain layers. Blockchain technology has made central authorities like the Federal Reserve irrelevant, and as more people come to the realization of this fact, it will become clearer as time goes on that the central banks of the world have outlived their usefulness, and their antiquated models of doing things are now obsolete. And programmable blockchain technology, like EOS in particular, will lead the charge in this economic revolution to come.
I am reminded of a famous quote, by Abraham Lincoln who said,” I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”
To all Eos holders, decentralized blockchain is the future.
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